Honda set to Amaze India with diesel drive

Honda Cars India makes its much-awaited entry into the diesel segment with the Amaze. Will this car be a game-changer and can it help Honda re-write the rules? Shobha Mathur reports.

Autocar Pro News DeskBy Autocar Pro News Desk calendar 18 Apr 2013 Views icon4282 Views Share - Share to Facebook Share to Twitter Share to LinkedIn Share to Whatsapp
Honda set to Amaze India with diesel drive
Honda Cars India makes its much-awaited entry into the diesel segment with the Amaze. Will this car be a game-changer and can it help Honda re-write the rules? Shobha Mathur reports.

Honda has just driven into the news in India. The past fortnight has seen it announce aRs 2,500 crore investment in its Tapukara, Rajasthan plant, reveal its first diesel engine for India, and then on April 11, take the overs off its all-new Amaze saloon.



Honda Cars India (HCI) expects two-thirds of sales of the Amaze to be in India’s Tier 2 and Tier 3 cities. Hironori Kanayama, president and CEO, made this comment at the Mumbai launch of the car, the company’s first-ever diesel offering in India. He said that Honda had always been at a disadvantage since it did not have a diesel offering but with one now, it hopes to target a new set of buyers as well as families who seek a spacious and affordable car. The Amaze is an under-four-metre-long car that squarely targets the MarutiDzire. So with this car, the Japanese carmaker has made clear its intention of taking competition straight into the rival camp, more than making up for its long-existing lacuna in the diesel segment with its tagline ‘BadleApkiDuniya’.

Kanayama said that with the Brio, the company had made a foray into smaller segments. The Brio is positioned as a city car which has a somewhat premium image. Now with the Amaze, Honda wants to make its mark beyond the major cities and get more footfalls into its showrooms.

Made-for-India diesel
The Amaze will be positioned below the City in the lower C-segment and target the mid-income, middle-age businessman, two-wheeler upgrader and married couples. Under the hood is a 1.2-litre petrol engine that has seen duty in the Brio and the all-new 1.5-litre i-DTEC diesel engine. The diesel motor has been developed exclusively for the India market with engineers from India, Thailand and Japan working on it. The company made an extensive presentation on what went into the making of the Amaze. Apart from space, the car’s unique USP is fuel efficiency of 25.8kpl, which HCI claims is the highest for any car in India. As a sub-four-metre offering, the Amaze will attract a lower excise duty of 12 percent that accrues to cars in this genre. Kanayama said that Honda’s Greater Noida factory has a capacity of 440 cars per day and the break-up of models that roll out will depend on the demand that the Amaze generates. For March 2013, SIAM says that 2,552 units have been shipped wholesale to the company’s dealers.

Meanwhile, in readiness for the Amaze, Honda announced a month ago that it has temporarily suspended production of its Jazz premium hatch and will now launch the 2014 model. About six months ago, the company said that it was withdrawing the Civic from the India market to make space for the Amaze. It sold the remaining kits of the car with the last sold in February. The decision to withdraw the Civic was motivated by the fact that the segment which it targets has been declining.

In 2012-13, the Jazz sold just over 6,000 units while the Civic sold 685 units. Other models like the Brio, City, Accord, and CR-V accounted for sales of over 65,000 units with the carmaker growing 35 percent by selling an all-time high volume of over 70,000 units during April 2012-March 2013 as compared to 54,427 units in the year-earlier period. The Amaze, production of which began in March, will be produced in volumes of 4,000-5,000 units monthly before further ramp-ups based on market demand.

The Greater Noida plant has a total production capacity of 120,000 units per annum. It produces the Brio, City, Accord, the new CR-V besides the Jazz and Civic on flexi-assembly lines. In December 2012, when Autocar Professional visited the facility, the majority of the cars rolling off the lines were the City saloon and the Brio hatchback. Amaze-ing pricing

For the Amaze, its pricing is set to be the clincher as the entry-level saloon will be available in both manual and automatic transmissions in the petrol trim while the diesel have only with a manual transmission. The starting price for the four petrol variants with MT is Rs 4.99 lakh for the base E trim going up to Rs 6.60 lakh for the top-end VX variant. The automatic variant will come in two editions with Amaze SAT priced at Rs 662,000 and the VXAT trim at Rs 750,000. In diesel, the Amaze comes in four variants with the E variant retailing at Rs 599,000 and the top-end VX version costing Rs 760,000 (all prices, ex-showroom Delhi).

At present, HCI has no plans to bring in an automatic diesel Amaze though in some of its other petrol models like the Accord and CR-V SUV, the AT accounts for 50 percent of the total and 15 percent in the City and Brio hatchback.

But with diesel prices liberalised in small amounts on a monthly basis, there are varied views on whether Honda may not have chosen the right time to bring in a diesel offering. However, the carmaker is clearly banking on diesel if one goes by the fact that the print and audio-visual ad campaigns are in six regional languages and stress the mileage and price of the diesel. To study its target audience, JnaneswarSen, senior vice-president, marketing & sales, said the company did home visits as well. However, lately, there are indications that diesel buying could be seeing a sort of cooling off. Even industry body SIAM has predicted a rise of Rs 4-5 per litre for the fuel during 2013-14 while petrol is set to drop by a similar amount during the year. But Kanayama said that the rise in diesel prices will not have any change in Honda’s plans for India. “We make the best petrol engines and the diesel portfolio will only extend our coverage of the Indian market,” he added.

High on localization
The Amaze has started out with a localisation content of 90 percent, which is similar to the Brio, with 180 suppliers contributing to it. It is also the first of the five new models to be launched by HCI over a three-year period. Other models will also be on offer in both petrol and diesel options. Kanayama said, “Currently, we operate in 10 percent of the petrol segment of the Indian passenger car industry but with the addition of the diesel that is expected to increase to almost 50 percent in the next few years.” Honda has, meanwhile, recently, announced a fresh investment of Rs 2,500 crore at its Tapukara plant in Rajasthan for setting up a new assembly line. The first car will roll out in the first half of 2014 from this facility which will have a production capacity of 120,000 units per annum. It has also established a fully integrated diesel engine component and assembly unit with a production capacity of 160,000 units per annum.

A new forgings unit, with a capacity for 10 lakh units per annum, will also become operational in 2014 at Tapukara. With this, Honda’s total investment in its expansion project including operations at Greater Noida will be Rs 6,700 crore. The expansion at Tapukara is expected to generate jobs for 2,200 people at start of production and combined with the capacity of the new plant, HCI’s total installed production capacity will rise to 240,000 units per annum in 2014. Exports of diesel engine parts from Tapukara have already commenced to the UK.

The new 1.5-litre i-DTEC diesel engine that powers the Amaze will also power new Honda models as well as facelifts, say company officials. This engine is being produced at Tapukara. The body panels, critical engine components for both the i-VTEC and i-DTEC engines, and manual transmissions of the Amaze are being manufactured at the Tapukara facility and are supplied to the Greater Noida plant for assembly in the saloon. Honda has taken some strategic decisions to strengthen its organisational structure to restructure the six major business regions. This aims to meet diverse customer expectations in each region. As part of this process, Honda Motor Company has placed senior executives in key markets to oversee critical functions such as manufacturing, purchasing and R&D. The global organisation structure came into effect from April 1, 2013 and as part of this structural change Yoshiyuki Matsumoto, who is vice-president of Asian Honda Motor, has been appointed president and CEO of Honda Motor India. He will take charge of product development, purchasing and manufacturing operations of Asia and Oceania.

Matsumoto told Autocar Professional that a new saloon may likely be launched after the Amaze in the Indian market. However, Kanayama said that while Honda sees potential in the C-segment, the City is already ruling the roost here. So any new model in this segment is not required for now but work on a new model has already begun in Japan and this could be a contender for the lower segment like the B or still lower.

Diesel to the fore
The Amaze’s 1.5-litre four-cylinder i-DTEC engine has an all-aluminium cylinder head joined to an open-deck engine block. It is the lightest engine in its torque-performing class. A lightweight crankshaft and a number of friction-reduction technologies help control friction in the diesel engine to petrol engine levels.

The 1.5 i-DTEC is based on Honda’s 1.6 i-DTEC engine technology that was leveraged in the Civic for the European Union. The same engine has been downsized and is equipped to reduce pumping losses with its cooling system and reduced mechanical friction leading to enhanced acceleration, explains Ryuji Matsukado, chief engineer, Honda R&D Company, Japan. The engine uses a new 3D engine oil with reduced viscosity to maximise performance and fuel economies and is believed to have been developed by Idemitsu India located in the Delhi-NCR.

The petrol Amaze is powered by the same 1.2-litre, 4-cylinder SOHC i-VTEC engine and is BS-IV- compliant, delivering fuel efficiency of 18kpl for the MT version and 15.5kpl for the AT trim, as per test data. Interestingly, Honda says the Amaze is based on its Smart Micro Limousine concept, focusing on stylish design, compactness, maneuverability and space. It will be great for city driving, said Atsushi Arisaka, Project Leader for the Amaze, R&D Asia Pacific. This compact saloon has leveraged efficient packaging to create space in the interiors, enabling the driver's seat height to be raised by 50mm compared to 30mm in competitors. “Power-folding ORVMs and a heat-absorbing front windscreen will be a segment first,” added Arisaka, chief engineer-LPL of Honda R&D Asia Pacific, Thailand. Sound-proof material has been used across the car body to make the drive smooth and noise-free.

In addition, Advanced Compatibility Engineering has been leveraged for the Amaze to raise safety levels of the car while reducing damage to other vehicles in the event of a collision. Furthering the emphasis on safety, the Amaze comes equipped with dual SRS airbags, ABS for preventing wheel locking, electronic brake distribution for improving braking performance, pretentioner seatbelts with load limiters and impact mitigating headrests. The ABS with EBD is offered as standard across all diesel and automatic variants. In addition, the front body structure of the Amaze is equipped with pedestrian injury mitigation technology.

Customer connect
To facilitate deliveries of the Amaze, Honda is expanding its dealerships with the focus being on increasing its presence in the Tier 2, 3, and 4 cities. At present, HCI has 150 dealerships across 97 cities and the plan is to then extend them further to 162 across 102 cities by 2013-14. To strengthen its connect with customers, Honda will also be organising service camps in cities where it does not have a presence through channel partners. For Honda, the just-concluded 2012-13 fiscal was a challenging year. Passenger car sales dropped 6.69 percent, as per SIAM data. “Consumer sentiments continue to be impacted by high finance rates and a wide gap between petrol and diesel prices. The rupee has also depreciated in the last one year, thus increasing our imports and production cost. However, the Indian economy is expected to revive in due course and global companies including Honda have a great potential in this market,” elaborated Kanayama. During the year, Honda launched the Brio automatic and also kicked off shipments to South Africa in October 2012, notching a big milestone for itself. The carmaker is already exporting several engine components to other Honda plants in the Asian region including connecting rods, crankshafts, cylinder blocks and cylinder heads as well as transmission cases made at the Tapukara plant.

Honda has set itself a global target of six million units annually by the fiscal year ending 2017 with three million coming from emerging markets including Asia-Oceania. Rounding off the Mumbai press conference on April 12, Kanayama said that despite the slowdown in India, a new car like the Amaze has the potential to expand the market.

(With inputs byBrian de Souza)
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