Honda Cars India believes the new City launched this week will have a positive rub-off on its successful sibling, the Amaze compact sedan.
In the process, it will mark a complete reversal of roles from last April, when the Amaze made its debut.
The overwhelming market response to the car ended up being the best piece of news for the already established City. As customers queued up at dealerships for the Amaze, some opted to go for the City, whose waiting period was not as long.
With the new City (production of its predecessor stopped in October), Honda believes a similar behavioural pattern will emerge, where some buyers would be inclined to go for the Amaze.
It is already the company’s largest selling model, with monthly numbers of over 6,000 units. The fact that it was the first Honda offering with a diesel engine gave it the much-needed impetus.
Fuel option The new City also comes with a diesel option, and is estimated to account for 70 per cent of sales.
Interestingly, as Jnaneswar Sen, Senior Vice-President (Marketing & Sales), points out, the Amaze started with 82 per cent diesel units at the time of its launch nine months ago. This, he adds, has come down since then to 60 per cent as demand for petrol cars has begun increasing.
“Diesel prices have been climbing and the price differential vis-à-vis petrol is not as profound as it was last year,” says Sen. Yet, Honda believes diesel will be the more sought-after fuel option, at least for now, as it continues to be cheaper than petrol.
Clearly, the Amaze has been a game-changer for the company, with 90 per cent of its buyers having never used a Honda car before — perhaps, the biggest tribute to the brand.
Sen says Tier II-III centres account for nearly 65 per cent of Amaze sales, a clear indication that the country’s big-car markets are not confined to the metros.
The company has pegged this at 58 per cent for the new City, which only reinforces the point of higher disposable incomes being prevalent in these parts of the country.
However, the idea is to ensure that customers stick to Honda right through their driving cycle.
The Amaze has emerged the entry-point (the smaller and more affordable Brio does only a fourth of its sales) and the next step is to opt for the new City.
As Honda prepares more offerings (the Mobilio multi-purpose vehicle and Jazz), the strategy is to keep a host of options in the product pipeline that will keep customers within its fold.
By the end of March 2015, the company’s total capacity may double to 240,000 units at its two plants with the Amaze likely to take over a third of the numbers.