Honda eyes a bigger ride from the new City

Chief Executive and President of Honda Cars India Ltd, Yoichiro Ueno, at the launch of Honda city 2017 in New Delhi (Photo: Sanjay Sharma)
Japanese car maker Honda is eyeing a bigger sedan ride from the launch of its fourth generation City, which has been facing a challenge from rival Maruti Suzuki's Ciaz. City, the best-selling model for Honda ever since it entered India in 1998 and segment leader for years, is now behind Ciaz in volumes.

"Since the Honda brand was established in India with the City as the first product, it holds a special place in the company and also among the customers. With this relaunch, we believe we will regain the segment leadership," said Jnaneswar Sen, senior vice-president (sales & marketing), Honda Cars India.

City has been launched at a price beginning Rs 8.50 lakh (ex showroom, Delhi) and the top end variant is priced at Rs 13.58 lakh. "I am confident that with the new City we will regain our leadership position in the segment," Honda Cars India President and CEO Yoichiro Ueno said. The City competes with Maruti Ciaz, which is available in a price range of Rs 7.86 lakh and Rs 9.96 lakh (ex-showroom Delhi). So, on a price point, Maruti still has the edge. But Sen said the new City is packed with several new features that will bring buyers back. In the last ten days, the company has received advance bookings for about 5,000 units (petrol and diesel combined) of the new City.

The significance of City is evident from its contribution to Honda's sales in India during the last nineteen years. The Japanese auto major has sold approximately 1.3 million cars in the country since it arrived. Every second car sold by the company happened to be a City.

However, country's biggest car maker, Maruti Suzuki, entered the space with Ciaz in 2014. Ciaz broke the jinx of Maruti's unsuccessful experiments with premium segments such as Kizashi and Grand Vitara. Both these products failed to deliver desired volumes. It gained a traction gradually and now sells about 4,700 units a month. The April-December (FY17) domestic sale of the vehicle stood at 47,114 vehicles, 23 per cent more than previous year's corresponding volume.

City, on the other hand, clocked a volume of 39,040 units during April-December, down 34 per cent from previous year. The decline of City volumes also reflected in the overall car sales of the company. During April-December of FY17, the company sold 108,552 vehicles, down 25 per cent.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel