Maruti SX4 overtakes Honda City

Honda City, the hottest selling car in the mid-sized car (A3) segment, has been toppled from its top position following the launch of Maruti's SX4, the auto major's first real challenge in the big car segment, according to unofficial figures.

Although Maruti did not reveal the retail figures of SX4 for the first six-week period following the May 7 launch, it claimed to have dispatched about 3,000 units during the period. This includes the cars displayed in showrooms and those used for test drives.

According to the figures provided by the Society of Indian Automobile Manufacturers (SIAM), the company sold 5,008 units in the A3 segment in May.

This constitutes a staggering growth of over 100 per cent compared with the same month last year. From 14.7 per cent in May last year, Maruti's market share in the A3 segment has virtually doubled to 25.2 per cent. During the same period, Honda City's market share has fallen from 22 per cent to 14.2 per cent.

In FY '06-07, Honda City was the market leader in this segment selling over 40,000 cars, followed by Ford India, which sold 39,822 cars. But that position changed in April as Hyundai stole the show with a sale of 3,028 units compared with Honda's 2,915 cars.

In May, Maruti upstaged both the auto majors, whereas Honda sold only 2,838 cars, a drop of 23 per cent compared with the corresponding period last month.

The other new car in the segment, Mahindra & Mahindra Logan, which was launched in April and started deliveries in May, clocked sales of 2,787 units for the month, grabbing a market share of 14 per cent in its first month in the A3 segment. As Logan is planning to ramp up production of the model in June, this could pose a tough challenge in the segment.

Honda admits that the new cars have made an impact. Jnaneswar Sen, senior general manager - marketing, HSCI, said, "There is some initial disturbance (in the sales of the City) which was expected. But in the long run, we will aim to maintain our leadership in the segment."

Despite the initial hiccups, the company is targeting a sales growth of 5 per cent for the City and hopes to sell 42,000 units this year, up from 40,400 units sold before the end of the current financial year. Sen also said that the five-day maintenance shutdown in May had reduced Honda's numbers.

The top-end variant of the Maruti SX4 is priced at 7.24 lakh (ex-showroom Delhi), which is cheaper than all the variants of the City except the base model (which is priced at 6.77 lakh). Logan's top-end variant does not even cross the Rs 7 lakh barrier, with the base variant starting as early as Rs 4.28 lakh.

In response to Maruti's challenge, Honda had recently circulated a 12-page document among its sales force, giving eight reasons why City is a better buy than SX4. Maruti saw this as an acknowledgement of substantial damage caused to the sales of the top Japanese car maker in India.

Rajesh Jejurikar, MD, Mahindra Logan, said, "Our biggest selling point for Logan is the fuel efficiency of the vehicle, which is better than the competitors (City and SX4). Moreover, we will be ramping up capacity from July, working on one-and-a-half shift basis. The factory will work on full capacity from August onwards."