Honda Siel, the Indian subsidiary of Japan?s Honda Motor, has moved a step closer to rolling out diesel variants of its popular sedan, City, and the recently launched hatchback, Brio.
According to sources, Honda Siel has brought diesel engines from Japan for its 1.2-litre Brio and 1.4-litre City for final road test in Indian conditions. The company will manufacture the diesel engines at its Rajasthan factory where it has enough room for capacity expansion.
?Honda?s plans to develop a small diesel engine are on track. However, no small diesel engine testing has begun in India. While Honda is committed to bringing a small diesel engine to India in view of the rising demand for diesel vehicles in the country, it is not possible to share timelines of the launch or the models in which it would be available in India,? a Honda Siel spokesperson said in an email response to FE.
The diesel variant of the two cars is expected to be launched by early 2013, sources said. The pricing would be competitive to take on competition from the likes of Vento (VW), Verna (Hyundai), Fiesta (Ford) in the sedan segment and Swift and Ritz (Maruti) and i10 (Hyundai), Beat (GM) in the small car arena. All these cars come in the diesel variant also. Honda is the only automaker in India that doesn?t offer diesel-engine cars. With diesel being cheaper than petrol because of government subsidy, lately diesel cars have become quite popular in the country.
The absence of diesel vehicles is thus eating into Honda?s market share. For instance, Honda Siel sold just 1,072 cars during December 2011 compared to 5,135 units in December 2010 – a drop of 20.82%.
However, the drop in sales is also because of the Tsunami and quake in Japan which has led to disruption is supplies of components.