Honda Siel, which makes cars such as the City, Jazz, Brio and Civic, is planning to introduce a low-cost sedan, which would also be the smallest sedan from its stable. The compact sedan that is being developed on the platform of its small car Brio (starting price R4 lakh) would be retailed at a starting price of around R5 lakh, competitively priced to take on Maruti?s Swift Dzire, which is the leader in the small sedan segment.
Honda?s new car at 3,995 metre will be just under the 4 metre mark that allows the car to remain within the 10% excise duty bracket, rather than the 22% applicable on bigger vehicles. The Brio sedan will be powered by the same 1.2-litre engine on which the Jazz and Brio run. When contacted a company spokesperson said, ?We will not launch any vehicle this year.? According to auto analysts, Honda?s move is in the right direction to spread out into newer segments to get back the market share it had lost to players like Volkswagen, Hyundai and Maruti. Honda Siel sold just 1,072 cars during December 2011 versus 5,135 units in December 2010.
The main reasons behind this drastic drop in market share is Honda?s absence in the rapidly growing diesel and small car segments.
In mid-2011, Honda launched its small car Brio at an attractive price but could not meet demand due to disruption in component supplies owing to floods in Thailand last year. Another brand, the Jazz, also could not garner enough sales for two years because of pricing. After substantial price cuts last year, though, sales started to pick up but it met with the same fate of shortage of component supply from Thailand. Honda operated at less than 50% capacity in six months of this fiscal.
Of late, the City, the largest selling sedan from the Honda stable, has also been on the ebb as the diesel variants of sedans like VW Vento, Maruti SX4 and Hyundai Verna, among others, have eaten into its market. Now, it is learnt that the company is planning to introduce diesel variants of both City and Brio by this fiscal end.
Honda has already begun production of the new City, while the rollout of small cars Brio and Jazz will start by the middle of the next month. The waiting period for Brio and the new City is about four to eight weeks, while that for Jazz is three to six months. The company hopes to completely utilise the existing plant capacity of 100,000 units in 2012 and it is likely to take decision on further investment in its production line at the Tapukara plant by middle of 2012.