Honda expects tier II,III markets will boost Honda City sale

Previous generation of Honda City witnessed around 50% sales from tier II, III locations in country

Automobile manufacturer Honda is expecting its new fourth generation Honda City model would see an increase in sales in the tier II, III markets, owing to its increasing dealership network in such regions. The company is also expecting its exports to go up from 2,000 units in 2012-13 to 6,000 units during the year 2013-14, ending on March, 2014.

Launching the new generation Honda City in Chennai, Shigeru Yamazaki, senior vice president and director of sales and marketing, Honda Cars India Ltd (HCIL), said, “We expect that almost 58% of the sales of new Honda City would be from the tier II, III cities i India.”

The previous generation of Honda City, which the company discontinued from the market from September 2013, has witnessed around 50% sales from the tier II, III locations in the country. However, Honda Amaze, the diesel sedan the company launched in 2013 has seen around 66% of the sales coming from the tier II, III markets.

The company currently has around 159 sales outlets in 101 locations is looking at increasing the reach to 170 outlets and 107 by March, 2014. According to a company official, the company has increased its presence in the tier II and III markets in the recent past and this would increase the sales to these region, said company officials.

Explaining on this, Jnaneswar Sen, senior vice president – marketing and sales, HCIL, said that there are different definitions for tier I, II and III in the market what the company consider as tier I is the top five or six cities while around 20 locations would be tier II and the rest would be tier III. This is determined based on various details including the size of the car market and the population in a region, he said.

He said that while the market size of the tier II, III cities individually would be less compared to the tier I cities, many of them are new markets and the number of such cities are more, which makes it an attractive market. He said that the new Honda City has received over 9900 bookings till yesterday.

The company is expecting to launch the new generation car model Honda Jazz in 2014-15. The company has started the third shift operations in its existing facility in Greater Noida to address the increasing demand, especially for Honda Amaze. It is expecting its new plant in Rajasthan to be ready within the quarter.

It is also expecting the exports to grow up from 2,000 units in 2012-13 to 6,000 units by March, 2014, said company officials.

The new generation Honda City, launched in Chennai today, has an ex showroom price starting from Rs 7.52 lakh to Rs 11.13 lakh for petrol variant and Rs 8.76 lakh to Rs 11.29 lakh for the diesel variant. While the diesel variant would be made available in showrooms soon after the launch, the petrol varient would hit the market in February, said Yamazaki.