We drive in the new City with Jnaneswar Sen, the senior vice-president of Marketing & Sales, Honda Cars India. He tells us the reasons the City is one of the longest running nameplates in Indian automotive history.
For a sedan to continue non-stop production run for 20 years in a tough market such as India is quite an achievement. In 1998, when Honda Cars India started operations by launching the premium sedan City in a small-car market, it was a gamble. Its competitors from that era—Maruti Esteem, Daewoo Cielo, Hyundai Accent, Mitsubishi Lancer, Ford Escort, Opel Astra—have gone in the annals of automotive history. The only other sedan that has had a longer run is Mercedes-Benz E-Class, which is in an altogether different segment. Twenty years later, the gamble appears to have paid off. “The City has sold over 35 lakh units in 60 countries. However, it is India where the sedan has come of age—the country is the largest market for the City, accounting for 25% global sales,” says Jnaneswar Sen, senior vice-president, Marketing & Sales, Honda Cars India Ltd. I am in Goa, driving the City ZX CVT i-VTEC petrol, from the airport to the Goa Marriott Resort & Spa. Sen San is my co-passenger. The variant I’m driving is priced Rs 13.56 lakh (ex-showroom, Delhi). The City was born in Thailand, in 1996. At that time, Thailand was in the early stages of motorisation, just like India. The smallest car Honda sold was the Civic, but to cater to first-time car buyers, Honda decided to develop a smaller car, and called it the City.
By 1998, when Honda entered India, the City had proven itself in Asian markets, so launching it here was an obvious choice, Sen says. It came with two engine options—1.3-litre and 1.5-litre, in petrol. In 2000, it got the acclaimed VTEC engine, which returned both high performance and high fuel-efficiency, something unheard of in those times. In 2003, the second-generation City arrived, with the 1.5-litre i-DSI engine. Those days, fuel-efficiency was synonyms with 800cc engines, but here was an engine double the size and yet had a claimed mileage of over 20kpl. Honda also introduced CVT automatic gearbox—the first in India. (The car I’m driving is equipped with the new-generation CVT, which offers more fuel economy than manual—traditionally, it’s the other way round.)
“The first two generations sold a total of 2,37,120 units (59,378 first-generation and 1,77,742 second-generation). The third-generation, launched in 2008, strengthened its hold over the market,” Sen says. This model, he adds, introduced i-VTEC engine technology, and came with ABS and airbags as standard. Its success (1,92,939 unit sales during 2008-13) set the stage for the world première of the fourth-generation City in India, in 2013. In early 2014, Honda launched the fourth-generation City, in two engine options—1.5-litre i-VTEC petrol and 1.5-litre i-DTEC diesel. “We had to introduce the diesel engine; the market was heavily skewed towards the fuel,” Sen says.
In fact, not having a diesel engine option meant the City had lost its leadership position for the first time, in 2011, to Hyundai Verna. However, armed with a diesel, the new City, within a month of its launch, again became the highest-selling midsize sedan in the country. “In early 2014, the petrol:diesel sales ratio for the City was 20:80,” Sen says. “Today, it’s turned on its head—at 78:22.” Since then, even though it faced tough competition, like Maruti Suzuki Ciaz in 2014 and the new Verna in 2017, the City has retained its leadership position. In calendar year 2017, for instance, it sold 62,573 units, the highest in the segment. Its cumulative sales, over 20 years, have been 7,10,519 units, which is more than half of Honda’s total car sales since inception.
“Numerous reasons can be attributed to its success,” Sen says. “One, the City has been the industry benchmark for quality and ranked at the top by the annual JD Power Initial Quality study 15 times. Two, its engines have been the best-in-segment in various parameters. Three, as far as features are concerned, the City has stayed a step ahead—like a CVT gearbox for the first time, ABS and airbags as standard offering much ahead of regulations, sunroof for the first time in its segment and so on. Four, the cabin space in all the four generations of the City has equalled that in cars a segment above. Five, its ergonomics and things like low cost of maintenance have ensured it got a dedicated fan-following.” Today, he adds, 22% of the new City buyers are repeat buyers. “There is also a fairly large number of buyers who have owned all the four generations,” he says.
As we drive past Coastal Honda, the company dealership in Panaji, Sen shares the role dealers have played in brand-building. “Over time, we, in partnership with our dealers, have ensured the City customer got a holistic package, from the right price to low cost of maintenance. This led to a strong brand building, by word of mouth.” This year, he believes, the City will continue its success run. But does the car need newer technologies, like a hybrid engine? He doesn’t reply specifically, but says that until there is a clear government policy on hybrids, it’s tough for carmakers to invest in future technologies. Meanwhile, as we reach our destination, I get a parking spot next to a BMW 3 Series. I notice that, parked next to a car that costs three times more, the City doesn’t look out of place. “Styling. It always works for an aspirational product such as a car, and it has always worked for the City,” Sen says.