Honda recently targeted the low price car segment in India, with the launch of its cheapest vehicle till date called Brio. The Brio hatchback is expected to come out as a strong contender, confronting the likes of Hyundai i10 and Chevrolet Beat. The small car was unveiled in New Delhi on 27th September 2011, carrying a highly-competitive price tag of Rs. 3.95 lacs for the low-end variant.
The all-new Brio is the smallest car produced by the Honda camp. It is important to note that by ensuring high levels of localisation, Honda has been successful in keeping up with its promise of offering Brio with a price less than Rs. 5 lacs.
However, Brio is mounted by the huge responsibility of ascending the continuously plunging Honda sales. Of late, the demand for most Honda cars have witness a nosedive in the country. Sales of Jazz, Accord and CRV have gone down by over 40 per cent in the first four months of the fiscal year 2011, while those of its renowned City sedan descended by 20 per cent.
The car maker started facing serious problems cropping up due to the disruption caused in the supply of critical components from Japan, as a result of the Tsunami in March. The aftermath of the catastrophe forced its facility in Greater Noida to operate at only 60 per cent of its capacity of 1,00,000 cars a year. Moreover, the Honda Siel's decision to recall 72,115 City models, in order to replace a faulty power window switch earlier this month, added to the woes. This was the third time when the company announced a recall in the last 20 months. Following the recall, Honda's image, of offering reliable and quality products, bore the brunt.
Another big hurdle for Honda is the absence of a diesel engine that complies with the requirements of the Indian market. The 2.2-litre diesel engine is quite suitable for the European market, but finds it difficult to adapt to the Indian cars. It is because the diesel available in India contains high quantity of sulphur. While close rivals such as Volkswagen and General Motors, which are known to introduce the diesel variants, have witnessed a boost in their sales. The sales of General Motor's Optra and Cruz swelled by 23 per cent in the first four months of the fiscal year 2011, contrary to that of Honda. Volkswagen too joined the party, selling 50 per cent more Passats this year.
Moreover, the company does not have any concrete plan to get over the slowdown that continues to grip the camp. "We have no concrete plan yet for a diesel engine. It is being developed in Japan and will take some time," Seki Inaba, Director, Sales and Marketing Honda Siel, was quoted.
It is important to note that the internal factors too, contribute to the problems faced by the company, at present. Lack of effective strategies and skilled vision, within the company, have made things more complicated for the company.
Thus, even if Honda has generated some of the most consummate cars in the world, satisfying itself by past records is not the solution. With Honda Brio, the car maker has something to look forward to, in the coming time.
