Honda India has introduced a new strategy to offer a cheaper Honda City sedan in India. In order to boost sales and promote the sedan, the company has launched a cheaper variant of the same car, thus making it more affordable. The sedan will now be available in five variants. The new variant is cheaper by about Rs. 50,000 and is available at an ex-showroom price (Delhi) of Rs. 6,99,000. The new price strategy by the company comes when most carmakers have decided to hike prices from January 2012.
According to industry experts, the move by Honda Siel Cars India (HSCI) was unexpected since the component sourcing and importing has become costlier owing to the depreciation of Indian Rupee in 2011. The key components are imported by the company from Japan and Thailand. Moreover, it is also focusing on localization of production and would not face any decline in the profit margins, says a company official. The bookings for the new variant of the Honda City sedan have begun and the deliveries will start from January 2012.
Honda had already reduced the price of the sedan by Rs. 60,000 in the month of June 2011 and slashed the price of its premium hatchback Jazz by Rs. 1,65,000 which is now available at Rs 5,50,000.