Honda Cars India’s new City is leading in the mid-size sedan category, considered an important segment for all companies in the domestic market. The City is followed by Hyundai Motor India’s Verna, whose sales have been declining.

Data collected from industry body Society of Indian Automobile Manufacturers (SIAM) and company sources show that while sales of the City crossed 50,000 units between January and July, Verna sales were around 23,000 during this period.

Brand power According to SIAM, both the cars come under the mid-size sedan segment, with seating for up to five persons and length between 4,250 and 4,500mm, available in both petrol and diesel engines with capacity up to 1.6-litre.

Analysts attribute higher demand for the Honda City not only because it was launched recently (in January), but also because of brand ‘Honda’, considered among the top three (the other two being Maruti Suzuki and Hyundai). The Honda City at its peak sold more than 9,000 units in a month (March), which the Verna never could in the recent past. While the City is selling around 7,500 units on a monthly average between January and July, the Verna was selling around 3,400 units.

Others in the segment such as Volkswagen’s Vento, Tata’s Indigo, General Motor’s Sail and Nissan’s Sunny are not comparable to these numbers.

Asked about the reasons for consumer preference for the Honda City over the Verna, Puneet Gupta, Principal Analyst, (India Automotive) at IHS Automotive, said: “Apart from the Honda brand being one of the top options for customers, there have been better footfalls at the showrooms since its launch, which Hyundai or Volkswagen could not see.”

There is another advantage. Several customers choose to buy the City base variant (petrol), priced at ₹7.2 lakh (ex-showroom, Delhi), rather than the top-end one (diesel) of Honda Amaze (compact sedan), priced at ₹7.49 lakh.

Win-win situation “Therefore, it is a win-win situation for all three – the company, dealers and the customers. Also, word of mouth for Honda City is positive compared to Verna,” Gupta said.

The Honda City, available in both petrol and diesel engine options (both 1.5-litre engine), is priced between ₹7.20 lakh and ₹11.05 lakh (ex-showroom, Delhi), while the Hyundai Verna is priced between ₹7.18 lakh and ₹11.51 lakh (ex-showroom, Delhi), available in both petrol and diesel (1.4-litre and 1.6-litre).

However, some analysts said because of new launches, companies enjoy good numbers for the initial months and one should watch for the numbers in the long run.

“Every company is launching better vehicles every now and then, and their sales grow in the initial phase. Diesel vehicles are in demand right now (around 60 per cent), but it will come down to around 25 per cent in the next 12-18 months,” said Abdul Majeed, Partner at Price Waterhouse.

Related Topics
comment COMMENT NOW