Honda Siel Cars India slashed Honda City prices by as much as INR 66,000 on Tuesday. The new cost structure, ranging between 4 to 8% in cuts is effective from yesterday onwards. The City will now be priced between INR 7.49 to 9.89 lakh according to ex-showroom prices in Delhi.
The company’s Sr. VP of Marketing and Sales, Jnaneswar Sen, said that anticipating increased volumes because of economies of scale in second half of this year, they have made significant cost reduction that they are happy passing on to their customers immediately.
He also added that their R&D division of the company began working on cost reduction and localisation activities for their volume model since 2009. Honda City is one of the leading mid size petrol sedan in its segment. Increasing competition from models like Maruti SX4, Hyundai Verna and Volkswagen Vento, and lack of diesel variant, however, intensified the competition further.
He said that their recent move is also directed to gain advantage of the recent strike at Maruti’s Manesar plant that has halted the production of their Dzire car. This car accounts for 30% of the market share of the compact sedan segment that is currently up for grabs.
Market analyst, Basudev Banerjee at the Quant Global Research Co. said that it’s not Honda alone that is wooing customers, but also Volkswagen that introduced a 7% interest on Vento car loans, against the 13% market rate.
He also added that these sops would not end here. He expects more manufacturers in this category to launch incentives like low finance rates, price slashes and other for their customers. This price reduction by Honda is also to contend with the Vento’s cutthroat price range.