Asia Bizz: Japanese automobile manufacturer, Honda on Tuesday announced a major price cut on its Honda City in India. The company has announced a price cut of Rs. 66,000 in order to revive the falling sales of the sedan in the Indian automobile market.
There was a time when Honda had dominated the sedan segment with the City, but in recent times, a huge drop is seen in the sales of the sedan after Hyundai and Volkswagen had launched their sedans to compete with the City.
One of the major reasons the sales of the City had gone down in India was due to the fact that the company could not offer a diesel version of the car. Moreover, the soaring prices of petrol also led to the dip in the sales of the sedan.
The sudden decision of the price cut has come as a surprise to customers as Honda had never practiced price cuts since it has always believed that it would diminish the value of the cars that are already sold. Talking about competition, the Honda City had tough competition from Hyundaiâ€™s Verna and Volkswagenâ€™s Vento that sold at prices much lower than the City. Moreover, Hondaâ€™s hatchback Jazz too failed to take off in the Indian market due to its high pricing, which began at Rs.7 lakhs. Honda was also hit by the tsunami in Japan due to which the supply of the parts to India was delayed.