The Hindu Business Line : Honda plans India-specific small car

Make Fit
Despite having a few small cars in its portfolio, developing an emerging markets specific small car will be a full-blown product development exercise.
Honda has a clutch of small cars like the Zest, Life, Edix, Fit and That's.

Chennai June 22 Honda's strategy for the Indian car market has been one of the most calculated, conservative and apt from amongst the manufacturers that do not have a small car in their portfolio.

Honda has consistently managed to lead in every segment of the passenger car market that it has a presence in. So, naturally, when the company says that it is developing a small car specially suited to emerging markets like India, the rest of the industry will be a worried lot.

However, despite Honda already having quite a few small cars in its global portfolio, developing an emerging markets specific small car will still be a full-blown product development exercise.

Unlike Suzuki Motor Corporation, most other Japanese car manufacturers have small cars in their portfolio that are only meant for the domestic market. Honda too has a clutch of small cars like the Zest, Life, Edix, Fit and That's.

But, except for the Jazz, which is called Fit in Japan and some other markets, most other small cars are only available in Japan. These small cars will fall within the definition of a small car, as we know it dimensionally, but not in terms of their potential price position when made in India. So it is inevitable that Honda develop a whole new small car. The company may borrow an existing platform, like the one on which the Life is built on.

Jazz entry

It is almost certain that the new 2008-year model of the Jazz, a premium hatchback will make it to the Indian market. The Jazz is based on the same platform as the Honda CityZX. At 3,830mm, the Jazz will meet the 4-metre overall length parameter that the Government has set for being eligible for the lower 16 per cent excise duty rate.

However, in most markets the Jazz or the Fit is currently being offered with a 1.5-litre petrol engine, a feature that will disqualify it for the lower excise rate, based on the Government's other 1.2-litre engine size limitation for eligible small cars. Honda could be developing a smaller sized version of its i-DSI engine for meeting the norms.

In the next two to three years, Honda Siel Cars India will have at least two small cars in its portfolio. Other than the premium hatch Jazz, the additional, India-specific small car will be in the B-segment, in the Rs 3 lakh-plus price category.

Tata Motors' much-talked-about Rs 1 lakh ($2,500) car and the potential sub-$3000 competitors from Renault and Suzuki have been stirring up a lot of speculation about other manufacturers following suit. However, Honda is unlikely to join the fray and its small car would more likely be priced in the region of $8,000.