NEW DELHI: Honda made an aggressive pitch in the high-volume compact car segment by rolling out Brio on Tuesday, pricing the base variant at Rs 3.95 lakh (ex-showroom Delhi). The lowest-priced car from the Japanese company's stable will compete with models like Maruti's Swift and WagonR and Hyundai's i10 and i20.
After effecting major price cuts on its two models -Rs 66,000 cut on the City sedan and Rs 1.6 lakh reduction on Jazz - Honda expects the 1200cc Brio will lead its revival in India. However, the push comes at a time when demand for diesel vehicles has gone up in a big way and Honda does not have diesel engine. Company officials said they were confident that the Brio would manage to generate sufficient demand just as its R&D (research & development) centre works on developing diesel engine. Honda has fallen behind due to absence of diesel variants from its line-up and rising competition from companies like Volkswagen and Hyundai.
While the overall car market grew at 30% in the last financial year, Honda's sales fell 4%. In the first five months of the current financial year (April-August 2011-12), the company's sales have dropped 13%, though this has happened in a struggling passenger vehicle market, which has managed only a 2% growth. "The Brio gives us entry into the big-volume segment," Takashi Nagai, president and chief executive of Honda Siel Cars India, said. Nagai did not speak on the company's profitability in India post the price cuts on City and Jazz, but industry analysts said Honda has decided to go in for volumes at the cost of margins.
"Yes, there is dieselisation happening in the market. But we are confident on the Brio as we feel that it will give an efficient total cost of ownership," Jnaneswar Sen, senior vice president (sales & marketing), said..
After effecting major price cuts on its two models -Rs 66,000 cut on the City sedan and Rs 1.6 lakh reduction on Jazz - Honda expects the 1200cc Brio will lead its revival in India. However, the push comes at a time when demand for diesel vehicles has gone up in a big way and Honda does not have diesel engine. Company officials said they were confident that the Brio would manage to generate sufficient demand just as its R&D (research & development) centre works on developing diesel engine. Honda has fallen behind due to absence of diesel variants from its line-up and rising competition from companies like Volkswagen and Hyundai.
While the overall car market grew at 30% in the last financial year, Honda's sales fell 4%. In the first five months of the current financial year (April-August 2011-12), the company's sales have dropped 13%, though this has happened in a struggling passenger vehicle market, which has managed only a 2% growth. "The Brio gives us entry into the big-volume segment," Takashi Nagai, president and chief executive of Honda Siel Cars India, said. Nagai did not speak on the company's profitability in India post the price cuts on City and Jazz, but industry analysts said Honda has decided to go in for volumes at the cost of margins.
"Yes, there is dieselisation happening in the market. But we are confident on the Brio as we feel that it will give an efficient total cost of ownership," Jnaneswar Sen, senior vice president (sales & marketing), said..
Seki Inaba, director of marketing at Honda Siel, said he expects the Brio's volumes to be at least at the level of the City sedan. Honda hopes that with Brio sales picking up, the company will generate enough volumes to start production at its second plant at Tapukara in Rajasthan. The company's Greater Noida plant has a maximum capacity of 1.2 lakh units, roughly double to what it sold in the last financial year.
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