Honda Siel Cars India (HSCI), a joint venture between Japanese and Indian enterprises, has planned to manufacture a compact sedan for the Indian automobile market. The company had earlier introduced several cars like Jazz, Civic, Brio and City in India, which are quite popular. HSCI will develop the low-cost sedan on the platform of its small car Brio that has a price tag of Rs. 4 lacs.
Reportedly, the new model by Honda Siel will measure 3,995 mm that will make it eligible to remain under 10% excise duty bracket instead of 22% levied on bigger automobiles. The compact sedan will be equipped with the 1.2 litre engine that is incorporated in other Honda models, namely Brio and Jazz.
Auto analysts believe that HSCI has opted new strategies that will assist the company to expand its operations in the Indian automobile market. Honda had to temporarily halt its production due to the natural disasters that occurred in Japan in 2011. Due to this, other competitors like Maruti Suzuki, Volkswagen and Nissan were partially successful in attracting potential customers.
Honda was not able to produce enough diesel and small car models that in turn affected its car sales. According to the sales figures, HSCI sold mere 1,072 units during December 2011 as compared to 5,135 cars in December 2010. The company tried to improve the sales graph by introducing Brio in mid-2011 at low price, but floods in Thailand adversely affected the production. The company was solely dependent on Jazz for its sales volume, but due to the high price tag the model failed to attract Indian customers.
After slashing the prices, HSCI did witness improvement in car sales, but this favourable period was short lived. This was because the production was closed due to the shortage of components that were meant to be imported from the unit in Thailand. Thus, Indian customers had to wait for a long period to buy their favourite Honda model. According to company officials, the waiting period for Jazz is about 3-6 months, whereas for the new City and Brio is around 4-8 weeks.
Honda City is the largest selling sedan but non-availability of its diesel variant has jeopardised its position in the Indian market, in the wake of increasing petrol prices and availability of diesel models by other car makers. Maruti SX4, Volkswagen Vento and Hyundai Verna are some of the models that are currently dominating the diesel sedan car segment. To overcome this situation, Honda will soon introduce diesel variants of Brio as well as City by this fiscal end.
At present, the company is focusing on increasing its production of Brio, Jazz and new City to meet the rising demand. For the year 2012, HSCI will plan to manufacture 100,000 units and in mid-2012, company will decide about investment procedures at its Tapukara plant.
About its new offering, the small sedan by Honda Siel, sources state that it would be available at a cost of Rs. 5 lacs. With this pricing, the model would give fierce competition to the popular Maruti Suzuki Swift Dzire. However, it is not clear as to when the company will launch this model in India. Moreover, the company spokesperson said, “We will not launch any vehicle this year.”
