Indian Autos blog

Some really good news for Honda fans. The Honda City which lost its top spot 3-4 months ago to other competitors, came back in the game very strong in July. The Honda City sold 4,092 units only second to Hyundai Verna which sold 4,724 units.

Last few months have been very troublesome for Honda Siel India. After constantly forgoing its leadership position segment after segment that it dominated, the company lost the most valued position that it had. It had to forgo its leadership position in the segment which it had dominated with the help of the City for donkey’s years.

The reason was that competitors were offering better value propositions than Honda. The Vento brought German build quality with an affordable price tag to the table. Maruti Suzuki plonked a diesel engine in its SX4. And finally, Hyundai launched the new Verna which almost ate the City alive.

This came as a wake up signal for Honda Siel because the Honda City is the most successful car for the company. The company decided to aggressively price the City and started working on localization. At the end of the operation, there was a hefty price cut and the City’s new price was 7.43 lakh.

Being a competent product which now had a very tempting price tag, the cash registers were bound to start ringing.

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Feeling the heat from VW Vento, mid way through the month, Honda Siel slashed the prices of the Honda City by Rs 44,000-66,000 depending on the model. The move seems to have been worked in favor of Honda, although only marginally.

In May, the Honda City only sold 1,828 units whereas the arch rival Vento sold 2,403 units. However, things are a bit different this month as City has managed to ship 2,802 units and the VW Vento has only managed 2,457 units. So the Honda City may not have dented VW Vento’s sales but has definitely hurt the SX4 (713 units) and Fiat Linea 350 units (no typos there).

However, don’t jump for joy Honda boys as the City did not reclaim its top position in the C+ Segment. The title of the king goes to Hyundai Verna which managed to ship an astonishing 4,102 units in June. That’s nearly double of what the nearest competitors have managed.

The Hyundai has managed to capture the fancy of the Indian market with its tonnes of features and rational pricing. It doesn’t seem like the Verna would let go of its segment crown very easily as it has already clocked 20,000 bookings.

However, July will see the entry of a new contender – the Global Fiesta from Ford. The Fiesta is expected to create a shakedown in the now Hyundai dominated territory. Honda Siel, in its efforts to regain its top position, is planning to give the City a small facelift in the near future.

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Honda Siel India, in a totally unexpected move, has revised the pricing of the Honda City by Rs 44,000-66,000 depending on the model. No doubt, this move was triggered by the constant fall in the Honda City’s sales figures over the past three months. The company claims that cost reduction is possible through its cost reduction efforts in the supply chain & manufacturing.

Mr. Jnaneswar Sen, Sr. Vice President – Sales & Marketing, Honda Siel Cars India, said,

“Our R&D function in India (HRAP-I) started working on localization and cost down activities for our volume models from year 2009. In anticipation of bigger volumes resulting in economies of scale from the second half of current year, we have achieved considerable cost reduction and are happy to pass on the benefit to the customers with immediate effect. The Honda City would now start from Rs 7.49 lakhs (ex showroom Delhi).”

Over the past 3 months, the Honda City was evidently losing its sales to the VW Vento and SX4. This constant pressure from the competitors has finally opened the eyes of Honda Siel.

However, is this price reduction enough to bring back the growth considering the fact that two new competitors have entered the market? The Hyundai Verna has delivered a smash hit in the first month of its launch. The soon-to-be launched Ford Fiesta has serious potential to be a promising product. Between so much heat, will the Honda City claim its top spot again?

Automobile blogs based out of Thailand, a hot market for Honda products, have started reporting on the Honda City mild makeover expected to debut by October. To ensure no misinterpretation – there will be no drastic redo on the exterior.

Subtle changes to the front fascia, tail lights, bumpers and wheels are obvious. A display that gives out real-time fuel consumption data is expected to make an appearance. Other relevant additions will be appreciated, but we’re puzzled about which ones will make the cut. Interior upholstery can upgraded and minor changes to the dashboard is another prediction.

Honda revealed a City concept car two years ago in Australia sporting LED lamps and new wheels (pictured). Inspiration for the City facelift should most likely come from there.

Honda has said that its compact diesel engine won’t be seen till 2013 so that pretty much puts an end to the powertrain debate. The existing 1.5-liter petrol mill that drums up 118PS will remain shoe-horned under the City’ hood.

What do you think Honda should do with the new City?

Watch as the 2010 Honda City glides gracefully on the roads of Mexico. A car cannot be marketed the same way in every country, but I felt the Indian ad agency handling the City did a shoddy job. A person driving through a waterfall should be a theme park’s way of attracting people and not that of a car manufacturer with a killer product.

The Honda City generates a lot of Honda customers and it is high time time the company thinks of a diesel variant.

The City is a big hit in India with over 2.8 lakh sold since 1998

Honda City is one of the most popular cars in India. Don’t agree? Just look at the sales figure projected by Honda in a recent press release – it has crossed sales of 50,000 units in just 12 months.

The third generation Honda City was launched in September last year and ever since its fuel efficiency, refined engine and performance has been appreciated by the masses. The third generation Honda city employs a 1.5 litre 4-cylinder iVTEC engine that produces 118PS power and overall fuel economy of 16kmpl. The Honda Jazz has also played its part by acting as a bait to bring in new customers into Honda showrooms.

Masahiro Takedagawa President and CEO Honda Siel cars India -

We are very pleased with this milestone and would like to thank our customers for their trust and confidence in our product. Since its launch in 1998 the three generations of Honda city have sold around 2.8 lakh units in the country making it Honda’s best seller in the country.

The Honda Jazz is not only helping it get valuable feedback from hatch buyers which it feels would be essential when designing the global compact car, but also resulting in boost of Honda City sales!

OK, we find this one a hard pill to swallow.

The Jazz is also helping the company gather key market inputs for the global small compact car scheduled to be launched during 2011-12.

Honda Official -

“Our market research tell us that there are a considerable number of customers who come in to have a good look at the Jazz and end up buying the City”

Does this mean a person who is bent on purchasing a Honda vehicle find the Jazz less VFM or worthy than the City?

Honda continues to support the Jazz’ ‘tall’ pricing, shall we call it? – the official remarks with its premium feel and high level of features, it is “unlike run-of-the-mill small cars” in India.

The Jazz is a sub-4 meter hatchback and has a 1.2-liter engine which is spec-enough to avail benefits extended to small cars in the country. The car is pitched at the country’s younger generation and women who are on the lookout for a car.

The Jazz shares 60% of its parts with the City. In fact, one Honda’s staff charged with customer relations tells us Honda does not term or market this car as a hatchback or a close relative to the City. All the family matters end at the production line and in the showroom, the situation both cars in resemble an exam hall atmosphere.

Initial market feedback indicated the age profile of the Jazz user is five years younger to the typical City user – hinting Honda has succeeded in addressing a younger audience with this car.

True, but how many youngsters today in India, a country that looks for value, features and comforts more than anything else, afford a 7-lakh product? Honda says these people will be offered the more cheaper global small car scheduled for 2011-12.

Here’s a quick fact – Almost 45 per cent of Jazz buyers are existing Honda customers! cars, that is. This is a very encouraging sign which Honda believes is going to play a major role when introducing the small car. The brand is addictive, and the small car is going to recall all these people again in the future, it says.

Honda has began producing and selling one of its most popular model in Brazil. The Honda City will be not only be produced, but Mexico and other parts of South America will be export countries.

The City is the third model to be produced at the HAB plant after the Civic and Fit which were introduced in 1993 and 2003 respectively.

In Brazil the Honda City will be labeled as a ‘Fuel Flexible Vehicle’ (FFV) and the two variants of the city will be the FFV LX and the FFV EXL.

This is the same third generation Honda City Model which is currently sold in India, Thailand and other countries. The City is powered by the same 1.5 litre i-VTEC engine and is listed in the 1.5-liter sub compact sedan category in Brazil. Honda plans to sell 17,000 units in 2009.

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