With its low sticker price, Honda Motor’s new made-in-India compact SUV has been such a hit in Japan that the automaker in April and May was crowned the country’s top imported vehicle seller.

The Elevate first hit Indian showrooms last August, then debuted in Japan as the WR-V in March, becoming the first Honda model to be made in India and sold in Japan.

After the model landed in Japan, Honda began topping the list of imports by brand for the first time in nearly 28 years, beating out Mercedes-Benz, BMW, Volkswagen and all other global nameplates.

According to statistics from the Japan Automobile Importers Association, the number of imported Honda car registrations reached 3,472 in April and 4,204 in May, more than 20 times the monthly average of 173 units in 2023. In June, Honda finished second, behind Mercedes-Benz, even though its import tally climbed to 4,319.

The company said the total number of orders in the first month was approximately 13,000 units. The unexpected rush was four times higher than Honda’s monthly sales target, and the automaker had to temporarily stop taking orders for one of three grades of the model.

A factor driving the WR-V’s success is a price that starts at around 2.1 million yen ($13,200), including tax. Compare that to Honda’s Vezel SUV, which starts at around 2.7 million yen. “Honda’s motto is that we provide a good product at a fair price,” the leader of the WR-V development team, Munetsugu Kaneko, told Nikkei Asia.

In India, the price of Elevate starts at 1.191 million rupees ($14,300), according to the company’s website.

Kaneko said the team set the price range in advance so it could target Japanese drivers in their mid-20s to mid-30s. “I thought it would not attract [these customers] if the price was not reasonable,” he said.

Honda managed to reach that price range by employing a range of tactics, such as procuring made-in-India components.

Another tactic was to give the SUV a gasoline engine. Honda hopes the WR-V, which stands for “winsome runabout vehicle,” will attract drivers who in the near future will move up to an electrified vehicle.

Honda’s stated goal is to sell only EVs and fuel cell vehicles by 2040.

The model’s development was led by Honda R&D Asia Pacific, a team based in Thailand. This reflects Honda’s strategy to maximize its resources throughout Asia. “When we set India as the main market for the Elevate,” Kaneko said, “we concluded that it was efficient for us to develop it in Thailand.”

The Thailand facility had the requisite testing equipment and good proximity to India, right across the Bay of Bengal.

Although the model was originally designed for the Indian market, Kaneko said that early on he also set his sights on Japan. A second market would allow Honda to increase production, and besides, his team was convinced that Indian and Japanese drivers share some traits.

The Elevate’s small body size, large cargo space and other concepts matched drivers’ needs in both markets, Kaneko said, and the compact SUV category was gaining in India and Japan.

Import duties, or a lack thereof, also played into the decision to ship the SUV to Japan. “There is no tax when we import a car from India,” Kaneko said, citing an economic partnership agreement between Japan and India.

After the Elevate debuted, sales went well and the model picked up awards in India, Kaneko said.

While Kaneko’s team was sure the Elevate would attract many families in India, it figured there would be some minds to change in Japan, where consumers are sometimes suspicious of the quality of products made in other countries.

“There are ready-made ideas,” Kaneko said, “like, ‘this is made in India,’ or, ‘this is made in Thailand.’ Honda and I wanted to reset that.”

He went on: “There are no worries in terms of manufacturing capacity and techniques at the factory in India,” which has a Japanese quality assurance expert.

Moreover, the India factory is one of Honda’s newest.

“As WR-V development leader,” Kaneko said, “I learned we should utilize our global resources and see things from a bird’s-eye view. This already had been important and will only become more so.”