Honda plans new products for India, including SUVs and larger sedans, but has ruled out developing models unique for the market.
It will also add more features in future models to regain lost ground, Press trust of India (PTI) reported.
Indian buyers are moving up from A and B segments to the premium sector (the withdrawn previous generation Civic was regarded as such in India).
"The market is changing. We are seeing a big shift from A, B categories to upper segment and that's why Maruti and Hyundai are also trying to move to the premium side. So, we are also carefully monitoring this segment movement," Honda Cars India president and CEO Yoichiro Ueno told PTI.
There was also growth in SUVs and he hinted a new entrant was coming from Honda whose top model is currently the CR-V. He did not directly answer when queried if the smaller HR-V would be launched, saying only: "It really depends on customers' voice. If there is a lot of demand or request, then we might look at it."
Honda India has nothing to offer passenger car customers wanting to move up from its City sedan. Admitting that the gap between products in different segments has not helped the company, Ueno said: "There is a lot of demand to upgrade from City to bigger cars and unfortunately, we don't have a bigger car… Especially the dealers are requesting. They don't want to lose these City customers to other brands.
"We are receiving a lot of request to reinforce the SUV market, we have CR-V but practically City is the flagship model."
Asked about models specifically for India, Ueno told PTI: "At the moment, our strategy is to bring global models rather than exclusively develop for any specific market."
The shift in demand from diesel to petrol in India has also resulted in the company losing ground and it was late to adapt to the changes.
Fiscal first half sales were down 23% to 74,855 units while September volume fell 18.77% to 15,034 units, the report added.
Honda India's current range is Brio, Amaze, Jazz, City, Mobilio, BR-V and CR-V