Honda has announced a huge price cut for the Honda City car today with effect from 14th June. The price cut ranges from Rs 44,000 all the way up to Rs 66,000.
There are many reasons for this sudden price reduction though. The Volkswagen Vento now leads the segment in terms of sales. A few months back, the All New Honda City used to rule the premium mid-sized segment in India. The main reason for the drop in sales could be associated with the rising petrol prices and the interest rates apart from car buyers finding more value in other products like the Vento and SX4. Customers, all of a sudden moved on to diesel cars as prices of gasoline started to shoot up. Honda does not offer a diesel as of now and hence lost most of its customers to the VW Vento and the SX4 Diesel
Secondly, Honda’s traditional strength quality has been matched by other competitors in in recent times. There is more awareness among the consumers these days and since the competition was offering the same quality and far more features than the Honda City, they chose to move away from the Honda sedan. As consumers were offered with better options than the Honda City in the form of the Volkswagen Vento and Maruti SX4, both of which have a diesel engine in their line-up, the sales of the City started to drop rather steeply over the past few months.
With competition on the rise, Honda is forced to rethink their strategy and has decided to drop the prices of the Honda City. It is actually heartening to see Honda finally giving-in to the competition which could help boost sales of the City. The Honda City is actually a great car with one of the most reliable and fuel-efficient petrol engines available in India and it has been let down mainly by its premium price.
Having said that, since the car lacks features which it competitors are offering it would wise for Honda to include some more toys in the package. Finally, Honda should come with a diesel engine as soon as possible as that is what the market is demanding at the moment. The price drop will certainly make the Honda City more attractive to prospective buyers but in the long run, a diesel engine option could do more to sustain sales and help restore Honda’s position in the market. Like we’ve been reiterating time and again, god bless competition!