7
Honda CR-V Murali Iyer | [email protected] 91 22 4646 4613 DD MMM YYYY 30 April 2019 Test Drive Review Institutional Equities Bigger, better, brasher Honda unveiled the new CR-V at the 2018 Auto Expo in Delhi, and immediately drew rave comments given its macho looks and aggressive stance. In 2001, when Honda introduced the CR-V to India, it was the second generation globally. This iteration is the fifth generation globally (and the fourth for India). The CR-V has always held a special place in the minds of aficionados because of the manner in which the SUV drove – the volumes have taken a beating as the CR-V (so far) was only available in a petrol variant, while all other SUVs in the market were equipped with oil burners under their hoods. Well, Honda has corrected this now, even though the petrol mill continues to be used. Looks and design For starters, the new CR-V is bigger, bolder, and (dare I say) brasher than the outgoing CR-V. The lines are bold and aggressive, and it instantly fills the rear view mirrors of any vehicle that you may be following. There is a lot of muscle that one can see, but it also has a latent pleasing personality to it. So think muscular, and yet, gentle, not mean and nasty. The design team was tasked to come up with a vehicle where the dynamics are better, and they seem to have achieved it without compromising on some visual elements that are typically Honda or those that link the current CR-V to the older ones. There is a lot of added mass that clearly shows up in the beefed-up bonnet and those muscular lines that give so much of character to the CR-V. A thick chrome ring highlights the split grille with the Honda logo in the middle, while the daytime running LEDs highlight the full LED headlamps with a slim LED turn indicator nestling on top – the slim fog lamps at the bottom also get the full LED treatment. The front three-quarters gives the best view of the monocoque, with roof rails and a shark-fin antenna on the roof. The strong fenders and the creased wheel arches give it more appeal, but it is from the sides that the real growth of the CR-V can be seen. A longer wheelbase, better ground clearance than before, lot more glass all around, and that lovely rear overhang complementing the bulging wheel arches. The CR-V is definitely striking to look at, with a strong crease starting from the front bumper and running all the way to the rear. This isn’t an ugly or ungainly design that we are dealing with here, and the overhangs are very nicely done, despite the stretched wheelbase. The extra metal beyond the rear wheel arches add to the feeling of stability, as do the lovely 18-inch diamond-cut alloys that add a lot of character. The improved ground clearance helps too, with AWD having an even better ground clearance than FWD variants. The L-shaped LED tail-lamps offer a sleek design to complement the chrome strip extending from end-to-end at the rear. Overall, the new CR-V ticks all the boxes nicely in terms of design and visual appeal.

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Page 1: DD MMM YYYY Looks and design - iiflcap.com · 4/30/2019  · DD MMM YYYY 30 April 2019 Test Drive Review Institutional Equities Bigger, better, brasher Honda unveiled the new CR-V

Honda CR-V

Murali Iyer | [email protected]

91 22 4646 4613

DD MMM YYYY

30 April 2019

Test Drive Review

Institutional Equities

Bigger, better, brasher

Honda unveiled the new CR-V at the 2018 Auto Expo in Delhi, and immediately drew rave comments given its macho looks and aggressive stance. In 2001, when Honda introduced the CR-V to India, it

was the second generation globally. This iteration is the fifth generation globally (and the fourth for India). The CR-V has always held a special place in the minds of aficionados because of the manner

in which the SUV drove – the volumes have taken a beating as the CR-V (so far) was only available in a petrol variant, while all other SUVs in the market were equipped with oil burners under their

hoods. Well, Honda has corrected this now, even though the petrol mill continues to be used.

Looks and design

For starters, the new CR-V is bigger, bolder, and (dare I say) brasher than the outgoing CR-V. The lines are bold and aggressive, and it instantly fills the rear view mirrors of any vehicle that you may

be following. There is a lot of muscle that one can see, but it also has a latent pleasing personality to it. So think muscular, and yet, gentle, not mean and nasty. The design team was tasked to come up

with a vehicle where the dynamics are better, and they seem to have achieved it without compromising on some visual elements that are typically Honda or those that link the current CR-V

to the older ones.

There is a lot of added mass that clearly shows up in the beefed-up bonnet and those muscular lines

that give so much of character to the CR-V. A thick chrome ring highlights the split grille with the Honda logo in the middle, while the daytime running LEDs highlight the full LED headlamps with a

slim LED turn indicator nestling on top – the slim fog lamps at the bottom also get the full LED treatment. The front three-quarters gives the best view of the monocoque, with roof rails and a

shark-fin antenna on the roof. The strong fenders and the creased wheel arches give it more appeal, but it is from the sides that the real growth of the CR-V can be seen. A longer wheelbase, better

ground clearance than before, lot more glass all around, and that lovely rear overhang

complementing the bulging wheel arches. The CR-V is definitely striking to look at, with a strong crease starting from the front bumper and running all the way to the rear.

This isn’t an ugly or ungainly design that we are dealing with here, and the overhangs are very nicely

done, despite the stretched wheelbase. The extra metal beyond the rear wheel arches add to the feeling of stability, as do the lovely 18-inch diamond-cut alloys that add a lot of character. The

improved ground clearance helps too, with AWD having an even better ground clearance than FWD variants. The L-shaped LED tail-lamps offer a sleek design to complement the chrome strip extending

from end-to-end at the rear. Overall, the new CR-V ticks all the boxes nicely in terms of design and

visual appeal.

Page 2: DD MMM YYYY Looks and design - iiflcap.com · 4/30/2019  · DD MMM YYYY 30 April 2019 Test Drive Review Institutional Equities Bigger, better, brasher Honda unveiled the new CR-V

murali@iif lcap.com

Honda CR-V

2

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Honda CR-V – competition comparables

Honda CR-V Toyota Fortuner Ford Endeavour Mahindra Alturas G4

Hyundai Tucson VW Tiguan Skoda Kodiaq

Average monthly volumes

FY19 71 1762 486 286 128 88 170

Dimensions

Length (mm) 4592 4792 4903 4850 4475 4486 4697

Width (mm) 1855 1855 1869 1960 1850 1839 1882

Height (mm) 1679 1689 1835 1837 1845 1660 1672 1676

Wheelbase (mm) 2660 2745 2850 2865 2670 2677 2791

Ground Clearance (mm) 198-210 215 255 244 172 149 188

Seating Capacity 5 7 7 7 7 5 5 7

Kerb Weight - Petrol (kg) 1545 1880 1900 - - 1379 - -

Kerb Weight - Diesel (kg) 1666 1725 2140 2145 2204, 2238 2394 2150 1587 1720 1799

Fuel Tank (ltr) 57 80 80 70 62 71 63

Boot Space (ltr) 150-472 (522) 296-710 427-1050 270-750 513 615 270-630

Turning Radius (m) 5.5 5.8 6.2 5.5 5.35 5.75 6.1

Tyres 235/60 R18 265/65 R17, 265/60 R18 265/60 R18 255/60 R18 225/60 R17, 225/55 R18 215/65 R17, 235/55 R18 235/55 R18

Engine

Fuel P D P D D D P D D D

Transmission CVT 9AT 5MT, 6AT 6MT, 6AT 6MT, 6AT 6AT 7AT 6MT, 6AT 6MT, 6AT 7AT 7AT

Drive 2WD 2WD, 4WD 2WD 2WD, 4WD 2WD 4WD 2WD, 4WD 2WD 2WD, 4WD 4WD 4WD

Size (cc) 1997 1597 2694 2755 2198 3198 2157 1999 1995 1968 1968

Power - Petrol(bhp) 151.9 163.7 - - 152.9 - -

Torque - Petrol(Nm) 189 245 - - 192.2 - -

Power - Diesel(bhp) 118.4 174.6 157.8 / 197.3 180.5 182.5 141 147.9

Torque - Diesel(Nm) 300 420, 450 385 / 470 420 400.1 340 340

Fuel Efficiency (kmpl)* 14.4 / 19.5, 18.3 10.01, 10.26/14.24, 15.04 14.2, 12.6 / 10.6 12.35 13.03,12.95 / 18.42,16.38 17.06 16.25

Price (Rs Lakh) - ex Showroom Delhi (Petrol)

Base - - - - 18.75 - -

Mid - 27.83 - - 21.85 - -

Top 28.25 29.42 - - 23.72 - -

AWD - - - - - - -

Price (Rs Lakh) - ex Showroom Delhi (Diesel)

Base - - - - 20.78 - -

Mid - 29.84 28.2 - 23.62 28.7 35.37

Top 30.65 31.7 30.61 27.7 24.22 31.46 36.79

AWD 32.75 33.6 32.98 30.7 26.95 31.46 36.79

Source: IIFL Research, *claimed

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Honda CR-V

3

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Interiors and features First up, we are now dealing with a 7-seater CR-V, at least in the diesel avatar. The petrol sibling

features the conventional 5-seat layout. But straight away, the third row is fit only for small kids – or just about for ‘cattle class’ over small journeys. Anything longer, and one may well be dealing with

an acute attack of ‘rigor mortis’! Well, okay, there is a little more leg room that opens up when the middle row is slid forward – but two issues even then... One is that legroom will still be inadequate,

and secondly there will be issues with the leg room in the second row – and we will come to that a

little later. Also, climbing into the third row means joining a crash course at a Yoga institute!

In my view, the best option is to use the CR-V as a conventional 5-seater. With all seats up, the boot space is 150 litres, which improves to 472 litres with the third row folded. The boot space in the

petrol variant is 522 litres – this is due to the second row sitting flush on the floor. With the second row folded down – for carrying more load – the boot space is 936 litres in the diesel variants (1,084

litres in petrol). There is an adjustable floor provided in the 7-seater to ensure a flat loading bay. Unfortunately, Honda hasn’t provided an electric switch for the tail-gate.

The cabin is bright and airy (the panoramic sunroof makes life more cheery), with a nice twin-tone

treatment to the dash; quality of plastics/switchgears is premium, and there is a lot more luxurious

feel to the interiors than before. The dash is smartly laid out, with controls within easy reach. There is a 7-inch frameless touchscreen that takes centre stage. It comes with ApplePlay and Android Auto,

but surprisingly gives SatNav a miss. The digital instrument cluster is easy on the eye. The CR-V comes with “Lane Watch” – a camera mounted at the bottom of the passenger-side wing mirror,

giving a wide angle (~80°) of the view that side on the centre screen. It shows up when the ‘left’ turn indicator is given or can be brought alive by depressing a button. Cool feature, that!

Another attraction is the lack of conventional transmission. While the petrol comes with the

traditional lever for gear shifts, the diesels don’t have any stick transmission. They use a button-

operated transmission with controls positioned on the centre console. This is a real cool-looking feature and opens up a lot of space on the front. The diesels come equipped with paddle shifters too.

Be prepared to get used to these buttons, and also for time taken while quick shifting between drive and reverse modes in this arrangement.

Seating is extremely comfortable upfront, and so too is ingress and egress (even more so at the

rear). Bolstering is very good, with the wide seats offering a lot of support. The driver’s seat also offers an 8-way electric adjustment for the best driving position, while the leather-clad steering feels

good. The view from the driver’s seat is clean, with wide wing mirrors, a large IRVM (with auto-

dimming facility), and the push button start/stop system within easy reach. Rearward view is compromised due to the thick D-pillars, and the rear seats (especially with the headrests up). While

you have to rely on the reverse camera and rear parking sensors, I wish Honda could have provided sensors at the front too. While the “Lane Watch” is a fine feature (expensive to replace though), why

are simpler features missed out in cars like these, I wonder?

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Honda CR-V

4

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Slip into the second row, and the rear bench is wide enough for three adults. But the person in the middle will have to contend with not only a raised seat base but also a protrusion in the back due to

the armrest. The seating also gets compromised by a prominent floor hump, and the AC vents jutting out a tad. On long journeys, seating in the middle of the second row would be tricky. The seats have

good cushioning though and are comfortable. For third row passengers, there are four roof-mounted AC vents with 4-speed fan control. They contribute to superior cooling very quickly. But passengers

are bound to feel claustrophobic due to not just the lack of space, but also the smallish quarter glass

– the panoramic sunroof helps in a small way, but not when the sun is beating down!

Engine, performance, drive, handling The CR-V in its new avatar comes in two engine variants, and two drive variants. The 1997cc petrol

mill comes in a 2WD avatar and is mated to a 6-speed CVT. The 1597cc diesel is the new mill under the hood – this comes in both 2WD and AWD avatars, and is mated to a new 9-speed automatic

torque converter. The 2.0-litre SOHC i-VTec is the same from the outgoing model; it produces 154 bhp of peak power @ 6500 rpm and a peak torque of 189 Nm @ 4300 rpm. The point of attraction

for almost everyone is the 1.6-litre i-DTec oil burner from Honda’s ‘Earth Dreams’ family that is good enough to produce 120 bhp @ 4000 rpm and a peak torque of 300 Nm @ 2000 rpm. This comes in a

single turbo version to India, while Honda offers it abroad as a twin turbo producing 160 bhp. At the

outset, this is the disappointment. But let's keep that aside and drive.

This oil burner isn’t the usual clattery oil burner that we have seen from Honda – this is much more refined, and less noisy. But you do feel the lack of power on the highways and when trying for those

quick overtaking on clogged highways. Also, with such low power, was there a need for a 9-speed torque converter? I don’t think so. After the sixth cog, the higher gears are mere ego boosters of

driving a 9-speed SUV – nothing really comes out of it otherwise. While pushing the AWD to its limits on the highway, I was sorely disappointed when it the speedo needle climbs ever-so-slowly as the

engine reaches the maximum strain level on speeds. But overall power comes through very

smoothly, and it is not only an able cruiser, but also a nifty drive in city traffic. Having said that, I found the diesel a more involved drive than I did the petrol – there the power delivery is smooth, but

the drive isn’t too involved. The lack of paddle-shifters or a tiptronic also contributes to the less involved drive.

Overall drive and handling is excellent though, with the CR-V feeling rock steady in most

circumstances. It isn’t a vehicle that you can throw into corners gaily – there is a hint of body roll when you take corners at high speeds, but otherwise it handles with aplomb. We took the AWD on a

stretch of land where all that you had for a road was lots of gravel, mud, slush, and a host of refuse

material. The AWD handled itself very well, with adequate traction and handling uneven surfaces at bad angles with ease. The higher ground clearance also helped. While power is transmitted to the

front tyres as standard, the AWD transmits upto 40% of torque to the rear wheels as and when required.

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murali@iif lcap.com

Honda CR-V

5

Institutional Equities

The suspension is fairly absorbent, and the CR-V took really bad surfaces with ease – not just did it go over those surfaces without making us feel tetchy, the noise levels were also well contained when

the CR-V was going over those surfaces at higher speeds than is normal. Body movement over bad surfaces is well contained at regular speeds. Braking is pretty sure, and brakes have adequate bite,

with the 18-inchers providing adequate grip. All in all, this isn’t one of those vehicles that you would set tarmacs on fire with. But if you are looking for a steady ride on even bad surfaces (with Honda

reliability), then the CR-V is a good vehicle to be in.

Worth the money?

The new Honda CR-V has definitely grown bigger and better, comes with loads of features, adequate comfort, a third row (alright, just for kids), an oil burner under the hood, and boasts of pretty good

fuel efficiency (actually, that can also explain the de-specced version for India). It is contemporary, looks good, is refined, and offers a fairly decent package. But is it worth the price that is being asked

for? There is surely a lot more car on offer, but the money being asked for is definitely on the higher side. If you are looking for a reliable vehicle with the right ingredients, then look no further. But if

you are looking for something more, then there are others in the market.

Please click on the below pictures to refer to our earlier car reviews:

Top: Lanewatch camera under ORVM

Above: Lanewatch display

Right: Lanewatch button

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Honda CR-V

6

Institutional Equities

Disclosure : Published in 2019, © IIFL Securities Limited (Formerly ‘India Infoline Limited’) 2019

India Infoline Group (hereinafter referred as IIFL) is engaged in diversified financial services business including equity broking, DP services, merchant banking, portfolio management services, distribution of Mutual Fund, insurance products and other investment products and also loans and finance business. India Infoline Ltd (“hereinafter referred as IIL”) is a part of the IIFL and is a member of the National Stock Exchange of India Limited (“NSE”) and the BSE Limited (“BSE”). IIL is also a Depository Participant registered with NSDL & CDSL, a SEBI registered merchant banker and a SEBI registered portfolio manager. IIL is a large broking house catering to retail, HNI and institutional clients. It operates through its branches and authorised persons and sub-brokers spread across the country and the clients are provided online trading through internet and offline

trading through branches and Customer Care.

a) This research report (“Report”) is for the personal information of the authorized recipient(s) and is not for public distribution and should not be reproduced or redistributed to any other person or in any form without IIL’s prior permission. The information provided in the Report is from publicly available data, which we believe, are reliable. While reasonable endeavors have been made to present reliable data in the Report so far as it relates to current and historical information, but IIL does not guarantee the accuracy or completeness of the data in the Report. Accordingly, IIL or any of its connected persons including its directors or subsidiaries or associates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained, views and opinions expressed in this publication.

b) Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment of its original date of publication by IIFL and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments.

c) The Report also includes analysis and views of our research team. The Report is purely for information purposes and does not construe to be investment recommendation/advice or an offer or solicitation of an offer to buy/sell any securities. The opinions expressed in the Report are our current opinions as of the date of the Report and may be subject to change from time to time without notice. IIL or any persons connected with it do not accept any liability arising from the use of this document.

d) Investors should not solely rely on the information contained in this Report and must make investment decisions based on their own investment objectives, judgment, risk profile and financial position. The recipients of this Report may take professional advice before acting on this information.

e) IIL has other business segments / divisions with independent research teams separated by 'Chinese walls' catering to different sets of customers having varying objectives, risk profiles, investment horizon, etc and therefore, may at times have, different and contrary views on stocks, sectors and markets.

f) This report is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would be contrary to local law, regulation or which would subject IIL and its affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investors. Persons in whose possession this Report may come are required to inform themselves of and to observe such restrictions.

g) As IIL along with its associates, are engaged in various financial services business and so might have financial, business or other interests in other entities including the subject company(ies) mentioned in this Report. However, IIL encourages independence in preparation of research report and strives to minimize conflict in preparation of research report. IIL and its associates did not receive any compensation or other

benefits from the subject company(ies) mentioned in the Report or from a third party in connection with preparation of the Report. Accordingly, IIL and its associates do not have any material conflict of interest at the time of publication of this Report.

h) As IIL and its associates are engaged in various financial services business, it might have:-

(a) received any compensation (except in connection with the preparation of this Report) from the subject company in the past twelve months; (b) managed or co-managed public offering of securities for the subject company in the past twelve months; (c) received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) engaged in market making activity for the subject company.

i) IIL and its associates collectively do not own (in their proprietary position) 1% or more of the equity securities of the subject company mentioned in the report as of the last day of the month preceding the publication of the research report.

j) The Research Analyst engaged in preparation of this Report or his/her relative:- (a) does not have any financial interests in the subject company (ies) mentioned in this report; (b) does not own 1% or more of the equity securities of the subject company mentioned in the report as of the last day of the month preceding the publication of the research report; (c) does not have any other material conflict of interest at the time of publication of the research report.

k) The Research Analyst engaged in preparation of this Report:-

(a) has not received any compensation from the subject company in the past twelve months; (b) has not managed or co-managed public offering of securities for the subject company in the past twelve months; (c) has not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) has not received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) has not received any compensation or other benefits from the subject company or third party in connection with the research report; (f) has not served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the subject company.

L) IIFLCAP accepts responsibility for the contents of this research report, subject to the terms set out below, to the extent that it is delivered to a U.S. person other than a major U.S. institutional investor. The analyst whose name appears in this research report is not registered or qualified as a research analyst with the Financial Industry Regulatory Authority (“FINRA”) and may not be an associated person of IIFLCAP and, therefore, may not be subject to applicable restrictions under FINRA Rules on communications with a subject company, public appearances and trading securities held by a research analyst account.

We submit that no material disciplinary action has been taken on IIL by any regulatory authority impacting Equity Research Analysis.

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Institutional Equities

A graph of daily closing prices of securities is available at http://www.nseindia.com/ChartApp/install/charts/mainpage.jsp, www.bseindia.com and http://economictimes.indiatimes.com/markets/stocks/stock-quotes. (Choose a company from the list on the browser and select the “three years” period in the price chart).

Name, Qualification and Certification of Research Analyst: Murali Iyer

IIFL Securities Limited (Formerly ‘India Infoline Limited’), CIN No.: U99999MH1996PLC132983, Corporate Office – IIFL Centre, Kamala City, Senapati Bapat Marg, Lower Parel, Mumbai – 400013 Tel: (91-22) 4249 9000 .Fax: (91-22) 40609049, Regd. Office – IIFL House, Sun Infotech Park, Road No. 16V, Plot No. B-23, MIDC, Thane Industrial Area, Wagle Estate, Thane – 400604 Tel: (91-22) 25806650. Fax: (91-22) 25806654 E-mail: [email protected] Website: www.indiainfoline.com, Refer www.indiainfoline.com for detail of Associates. Stock Broker SEBI Regn.: INZ000164132, PMS SEBI Regn. No. INP000002213, IA SEBI Regn. No. INA000000623, SEBI RA Regn.:- INH000000248

Key to our recommendation structure

BUY - Absolute - Stock expected to give a positive return of over 20% over a 1-year horizon.

SELL - Absolute - Stock expected to fall by more than 10% over a 1-year horizon.

In addition, Add and Reduce recommendations are based on expected returns relative to a hurdle rate. Investment horizon for Add and Reduce recommendations is up to a year. We assume the current hurdle rate at 10%, this being the average return on a debt instrument available for investment.

Add - Stock expected to give a return of 0-10% over the hurdle rate, i.e. a positive return of 10%+.

Reduce - Stock expected to return less than the hurdle rate, i.e. return of less than 10%.

Distribution of Ratings: Out of 223 stocks rated in the IIFL coverage universe, 117 have BUY ratings, 6 have SELL ratings, 65 have ADD ratings and 33 have REDUCE ratings.

Price Target: Unless otherwise stated in the text of this report, target prices in this report are based on either a discounted cash flow valuation or comparison of valuation ratios with companies seen by the analyst as comparable or a combination of the two methods. The result of this fundamental valuation is adjusted to reflect the analyst’s views on the likely course of investor sentiment. Whichever valuation method is used there is a significant risk that the target price will not be achieved within the expected timeframe. Risk factors include unforeseen changes in competitive pressures or in the level of demand for the company’s products. Such demand variations may result from changes in technology, in the overall level of economic activity or, in some cases, in fashion. Valuations may also be affected by changes in taxation, in exchange rates and, in certain industries, in regulations. Investment in overseas markets and instruments such as ADRs can result in increased risk from factors such as exchange rates, exchange controls, taxation, and political and social conditions. This discussion of valuation methods and risk factors is not comprehensive – further information is available upon request.