Why the new City is more important for Honda Cars India than ever before

Once in a while, there comes a car that enjoys more than just a strong customer base. It boasts of a fan following too. The City, by Honda, is one such car. The other aspect of a strong performer is that it has to carry a heavy load of responsibility to sustain its manufacturer's market presence. More so if its sibling models do not find many takers. And that too has happened in the case of the Honda City.

In 2016, the Honda City, with sales of 57,619 units, contributed to 37 percent of Honda Cars India's total sales of 156,107 units. The rest of the sales volume came from 6 models (not counting 27 units of the Accord Hybrid launched in October 2016). The stakes on the 2017 Honda City are very high. Once the undisputed king of its segment, the Honda City was dethroned by the Maruti Suzuki Ciaz (which sold 63,187 units) last year. 

During the current financial year, the Ciaz has topped the segment for 7 months, and the City led for 3 months. The Ciaz leads the segment with a 42 percent share, followed by the Honda City at 35 percent and the Hyundai Verna with a 10 percent share.

L-R: Honda Cars India's president and CEO Yoichiro Ueno and Raman Kumar Sharma, vice-president, at the City launch. 

The 2017 Honda City, which was launched today, has the responsibility to wrest back the crown for its Honda from the Ciaz, which has also benefitted from the FAME India scheme under which the government incentivises customers for buying hybrid and electric cars. The Ciaz has a diesel hybrid variant.

Due to macro-economic conditions and product mix, some OEMs saw a dip in sales volumes during 2016. In the case of Honda Cars India, the drop was 23 percent. Sales volume of its best-seller, the City dropped by 31 percent. The extent of the drop in sales was the second lowest among all Honda models in India. The CR-V (736 units) saw the least drop of 19 percent, while the Mobilio (3,355 units) saw the maximum fall of 77 percent in 2016.     

With the other mainstream models not quite lighting up the sales charts, Honda's bet remains on the City to be its growth driver in India. Armed with additional features and more chiselled looks, the Japanese player has entered the next round of the game with even bigger stakes. Watch this space.

Also read: Honda records best-ever sales in ASEAN in 2016

Honda receives 5,000 bookings in 10 days for new City