Faced with falling market share, Honda's Indian unit plans a doubling of its slice of the pie within a few years.
The brand needs to achieve a 10% share to be a major player, Honda Cars India managing director Yoichiro Ueno told Reuters.
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Its market share fell to around 5% at the end of 2017 from 7% three years ago, the report said, as rivals Maruti Suzuki and Hyundai Motor launched numerous new models in a passenger vehicle market which passed 3m units last year and is expected to become the world's third largest car market by 2020.
Honda's lack of small cars, which attract lower taxes, is one reason, the report said.
"Our global line up is different so it is a bit difficult to utilise global resources," Ueno told Reuters, adding car tax policy in India needed to change to encourage carmakers to bring in products from their global range.
The automaker is using only 70% of its annual production capacity of 300,000 units in thr country and needs to boost output to be efficient, Ueno told the news agency.
Toyota earlier all but conceded it had lost the Indian small car battle to the dominant Maruti and Hyundai and would instead focus on launching 'global' cars aimed at the aspirational middle class. It launched a new Yaris sedan at the Delhi motor show this week.
Toyota's market share is also 5% and it is barely using half its also 300,000 unit annual capacity in India.
