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Honda India strikes back; launches new City and cuts prices of sedan

By Motortrend India Staff   |   14 December,2011

Desperate times call for desperate measures. After losing out to Volkswagen’s Vento, Japanese carmaker Honda is striking back by slashing prices and improving features of its flagship City sedan.

The carmaker has cut prices of City for the second time in six months and launched a new version priced at Rs6.99 lakh (exshowroom, Delhi).

This will pit the sedan, which had been a market leader for many years, in direct competition with Hyundai Verna and Volkswagen Vento that are also priced at Rs 6.99 lakh.

“We are adding features and cutting prices to make our cars more realistic to the prevailing competition in the market,” Seki Inaba, who took over as director (marketing) at Honda’s India subsidiary in March this year, said.

Inaba is largely responsible for the price cuts across different models. Before Wednesday’s reduction, City’s base model was available for Rs7.49 lakh, after Honda cut prices by Rs 66,000 in June.

“The price revision has been made in line with a newly launched City variant that is based on customer feedback,” Inaba added. Honda has been struggling with falling sales and production stoppages caused by a tsunami in Japan in March, and posted a 20 percent decline in sales to 31,699 units in the first eight months of the fiscal. In comparison, Volkswagen grew 107 percent and sold 52,037 cars while Toyota grew 86 percent to 91,981 units.

Honda’s forte in India has been the low-volume premium segment, where it sells the City, Civic and Accord sedans and the CR-V SUV. But the stupendous growth of late entrants such as Volkswagen and Nissan has forced Honda to concentrate on volumes.

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