The Hindu Business Line : New City, Accord help Honda Siel turn around

CARMAKER Honda Siel has wiped out its accumulated losses worth Rs 70 crore even as it has ruled out any plans to launch a small car or the premium Civic passenger car in India.

Powered by excellent sales of New City and Accord, the company started making profits during the current year. A Honda Siel spokesperson told Business Line that the company expects its turnover to increase by nearly 40 per cent during the current year to around Rs 1,827 crore. But for 2005-06, the increase in turnover could drop to 10 per cent to around Rs 2,000 crore.

The spokesperson said that the launch of New City sedan and Honda C-RV last year and higher sales of Accord had increased the overall sales of the company. But during 2005-06, sales would even out to industry average.

Before the launch of New City, the sales averaged around 1,000 every month but after the launch, it doubled. Between January and June 2004, Honda Siel sold around 7,600 New City cars. Even Accord's sales had doubled over the last one year, he said.

During last month , Honda Siel's India sales increased by 129.2 per cent to 2,769 units, largely on the back of New City sedan. During the same month, car sales in India grew 25 per cent to 65,046 units powered by carmakers such as Maruti, Hyundai and Tata Motors.

The company has so far invested over Rs 450 crore in its operations. Its current market share in the C segment is around 27 per cent, nearly double than that of last year. Honda Siel's current production capacity is around 30,000 units on a two-shift basis. "No further decision on expansion of the capacity has been taken so far," the spokesperson said.

He said the company has no plans to either launch a small car or the premium passenger car, Civic. "Our current strategy is to become the leader in the premium car segment and there are no plans as of now to launch any small car." There are also no plans to launch Civic in India.