From the largest selling sport utility vehicle (SUV) in the country, the Honda CR-V has seen a severe slump in demand due to its high price as compared to other vehicles in the category. The sales figures of the vehicle speak for itself ? only one car was sold in September this year against 127 units during the same month last year. The car sold 47 units in October.

Officials at Honda Siel Cars India (HSCI), which sell Honda CR-V in the country as a completely build unit (CBU), say the appreciation of yen over the past few months led to a sharp increase in price of the vehicle, leading to a slowdown in demand.

?From April this year, the yen has become stronger vis-?-vis the rupee. Since the vehicle is sold in India as a CBU, we had to increase the prices by Rs 3.7 lakh to mitigate the fluctuation in currency. Consequently, the value perception has changed and we are now taking firm orders for CR-V instead of maintaining its inventory at the dealer or company level,” said Jnaneswar Sen, senior general manager (marketing), Honda Siel Cars India, adding that since there is a shipment time of three months, the company did not sell a single unit in April, May and June.

Honda CR-V, which is currently priced at around Rs 22 lakh, competes with Ford Endeavour and Chevrolet Captiva. While Endeavour starts at around Rs 16 lakh, Captiva is available in the range of Rs 17.5 lakh to Rs 19.1 lakh.

As per figures provided by Society of Indian Automobile Manufacturers, Ford India sold 221 units of Endeavour in the domestic market in September against 248 units in September 2008, while the total sales of General Motor India (Tavera and Captiva) stood at 743 units in September vis-?-vis 812 units in the corresponding month last year.

However, analysts feel that apart from the exorbitantly high prices, the limited choices in the category and lack of innovations in the model since January last year are factors that spoilt the game for Honda in the SUV segment.

“Honda must seriously consider bringing in the diesel variant of CR-V in India when players like Ford and GM are refreshing their models every now and then,” said a Mumbai-based analyst.

“On top of this, the company should also consider assembling the vehicle in India as the custom duty on the completely knocked down units (CKDs) is less than on CBUs,” said Rakesh Batra, national automotive head, Ernst & Young.

However, Honda Siel Cars India seems to be in no mood to strengthen its foothold in the segment. “The diesel engine is designed for a different grade of diesel and it is extremely expensive. Therefore, neither do we have plans to introduce the diesel variant of CR-V in India nor start assembling the vehicle here,” Sen of HSCI said.