HSCIL president and chief executive officer Teruo Fujisaki said here that there is no question of resorting to price war as Honda City is equipped with latest technology to hold its own despite new entrants.

Asked to comment on the recent statement of Hyundai Motors India's (HMIL) director (marketing and sales) BVR Subbu that rivals of Accent would find it difficult to keep prices at their present price levels, Fujisaki categorically stated that Honda City's prices would not be slashed.

"We can say it with guarantee that our car (Honda City) offers value for money to customers," he added.

HMIL has claimed that while Accent was technologically benchmarked against Honda City and Mitsubishi Lancer, its price ranged between Maruti Esteem and Honda City. Accent's prices range between Rs 5.35 lakh and Rs 5.85 lakh, while prices of Ikon are between Rs 5.21 lakh and Rs 6.47 lakh. On the other hand, Honda City' prices range between Rs 5.90 lakh and Rs 8.4 lakh.

HMIL expects to sell one thousand Accents per month during the next 18 months with 50 per cent of the target to be met from the Esteem segment and the remaining with the premium segment. Ford India, on the other hand, expects to sell 20,000 Ikons next calender year with demand coming from every segment of the mid-size car market.

HSCIL general manager (marketing) AM Gupta stated that Ikon, Accent, Honda City 1.3 litres alongwith Esteem, Cielo and Siena mainly cater to lower premium customers, while Honda City 1.5, Lancer Ford Escort, Opel Astra are the upper premium segment cars.

In this situation, the recent introduction of Accent and Ikon would mean that the existing and the new players in the lower premium segment would end up hustling for space, which would result in re-adjustment of market share and volumes.

To some extent, new launches do result in market expansion as well. It is difficult to visualise exactly what would be the nature of the re-adjustment in short or medium term. However, there would not be any adverse impact on the sales of Honda City as a large proportion of buyers of this vehicle are upgraders from lower premium category or people who want an additional premium car.

Pointing out that savvy car users are motivated by brand image, product quality and performance, and after sales service, Gupta said these factors will enable Honda City to maintain its share in the premium car market.

HSCIL sold 4,816 Honda City cars during the first half of this financial year and expects to close the year at 11,000 units against 9,600 the previous year.