Honda Cars India set to increase prices across full model range

Japanese carmaker Honda Cars India, which launched its face-lifted Amaze sedan, is all set to raise prices across the board within a day or two.

“There will be a Rs 4,000-Rs 80,000 price hike on different car models and variants,” Jnaneswar Sen senior vice-presidnet (sales and marketing), Honda Cars India, told Autocar Professional on the sidelines of the Amaze launch.

This follows the Union Budget 2016-17 proposal to impose a 1 percent infrastructure cess on small petrol cars, 2.5 percent cess on diesel cars and 4 percent on SUVs and larger cars along with a 1 percent additional tax on luxury cars to finance infrastructure building projects.

Honda Cars India has been experiencing declining sales for several months now and in February 2016 its domestic sales were down 23 percent year on year to 13,020 units (February 2015: 16,902). While the Brio sold 399 units, Mobilio sales dropped to 226 units. Amaze sales were also down at 4,069 units compared to an average year-earlier sales of 5,000-6,000 units a month. The company attributes this to the slow phasing out of the original Amaze sedan  launched in April 2013 and marked Honda’s entry into the diesel engine market with its 1.5-litre i-DTEC engine. Now with the petrol version coming with an automatic transmission (CVT), Honda expects to  muster higher volumes.

“We expect a waiting period for the new Amaze,” adds Sen while being non-committal about the extent of the waiting period.

The carmaker had discontinued production of the old Amaze for some months now in anticipation of the newer version hitting the market and was phasing out the existing inventory of the sedan.

As regards the falling sales of the Mobilio MPV, Sen admits that the MPV segment has been facing a slowdown and declining growth that has adversely impacted the Mobilio.

For the present though, Honda is focusing on enhancing its retail sales and delivery and  will end the current fiscal at 300 retail outlets in 190 cities.

The new Amaze will be manufactured at the Greater Noida plant while the earlier Amaze was produced at both the Greater Noida and Tapukara plants. The City sedan too is made at both the plants while the new Jazz is produced at Tapukara.

The carmaker is waiting for the capacity expansion programme at its Tapukara facility to be completed by June when it will have more flexibility to raise capacities of its frontrunner models.

The BR-V SUV will also see a rollout in April and will require additional manufacturing capacity. In its components export business, Honda Cars India will end 2015-16 with exports of Rs 1,000 crore compared to Rs 700 crore in the previous fiscal with the US and China being the new markets added to its kitty.