Honda City has been suffering from falling sales for past few months. The major reason for the fall being some strong competition from cars like Volkswagen Vento, Maruti SX4, Hyundai Verna Fluidic etc. The Competition is only to get more intense with new cars like Ford Fiesta 2011 just around the corner. In an effort to reclaim its leadership position in the segment, today Honda SIEL announced a major price cut in its best seller Honda City sedan.
Honda City’s base variant will be now Rs. 66,000 cheaper than the previous price in India which is expected to be a major tipping point in the sales of Honda City since India is a very price sensitive market. The base variant which is Honda City EMT now costs only Rs. 7.49 Lakhs compared to the previous price of Rs. 8.15 Lakhs.
One interesting fact is that the fully loaded variants have received least price cut since it is targeted at the more elite customers who can pay the price for the extra gadgetry and equipment.
Honda City New Prices After Price Cut in June 2011
Price List of Honda City Ex-Showroom Delhi
| Honda City Model/ Variant | Honda City Old Price(Rs.) | Honda City New Prices (Rs.) | Price Cut (Rs.) |
| E-Manual Transmission | 815000 | 749000 | 66000 |
| S-Manual Transmission | 864600 | 819600 | 45000 |
| V-Manual Transmission | 909800 | 864800 | 45000 |
| V-MT Exclusive | 960900 | 916900 | 44000 |
| V-Automatic Transmission | 982000 | 937000 | 45000 |
| V-Automatic Exclusive | 1033100 | 989100 | 44000 |
As per an official statement Mr. Jnaneswar Sen, Sr. Vice President – Sales & Marketing, Honda Siel Cars India, quoted
“Our R&D function in India (HRAP-I) started working on localization and cost down activities for our volume models from year 2009. In anticipation of bigger volumes resulting in economies of scale from the second half of current year, we have achieved considerable cost reduction and are happy to pass on the benefit to the customers with immediate effect. The Honda City would now start from Rs 7.49 lakhs (ex showroom Delhi).”
This is a good time for Honda to take these measures and pass on the cost savings which it has achieved through localization to benefit the buyers as it will help the buyers as well as help increase the weak sales graph of Honda City. Since the competition in this space has got quite intense, with the Honda City now more cost effective, it will be interesting to how it changes buyers decision in making a car purchase.
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