A while back, we reported about Honda City slashing their prices by INR 66,000 to make their model more attractive to customers who were now opting for other popular brands in the same category. One of the main reasons why the City lost out in the race, was because of its pricing, the fact that is offered nothing new, and the last and probably the biggest factor, was that it still did not offer a diesel variant in a segment which was getting crowded by competitively priced diesel variants.
One of the new entrants in this sedan segment, the Volkswagen Vento managed to overthrow the City from the lead position in the segment. Now it looks like the Japanese auto manufacturer’s are looking to bring in some changes as well along with the recent slash in prices to bring back its former glory.
According to industry sources, a new City variant could be launched around October in the festival season. It is expected to sport exterior as well as interior changes. Sources also added that though some changes could be just cosmetic, the company could also introduce something different.
The design changes are likely to make the City more sporty. Changes are likely to be done to the tail lights and bumper area as well, however in doesn’t look like Honda will offer a new engine. While sources have projected a facelift, Honda has denied these plans. Honda said that they are not planning to introduce a facelifted City in the festival season. Right now their focus is on launching their hatchback car, Brio.
Sources however are positive that Honda is planning for a facelifted City, as the company desperately tries to fend its share in the luxury sedan category, though it seems like a loosing battle so far. While the City once led the aforementioned category, Honda is worried that it would lose further as other models gain a stronger foothold.
Moreover, the competition in this segment will be more heated, as Ford launches its global Fiesta soon in both diesel and petrol engines. Nissan and Skoda have similar plans as well. Sales of the Honda City saw an increase of just 3.5% in the last fiscal year, in spite of a growing market, with the passenger car category growing at 30%. Compared to the months of April to May fell by 43% in comparison to the 5,269 units sold of the Vento.
In the same period, sales of the Vento increased to 6,211 units from 3,520 units, an increase of 76 per cent, while sales of the Maruti SX4 increased by 63 per cent to 4,804 units.
The March 11 quake and subsequent tsunami also impacted the company, as supply of auto parts to India were disrupted, forcing them to cut down production by 50% at their Indian plants. The Honda City was earlier the volume driver for the company, but the new Brio compact from Honda, could overtake this position as it is introduced in the INR 4 to 5 lakh price bracket.