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Honda Siel denies plans for small car
Our Bureau
CHENNAI, January 23: Honda Siel Cars India Ltd (HSCIL) is not planning to introduce a small car in the local market in the near future, according to company president and CEO Teruo Fujisaki.Fujisaki said Honda would take a long-term view and then decide on the issue. "Our first priority is to sell Honda City," he said at a press meet. HSCIL launched the City in Chennai on Thursday with exclusive dealership arrangements with Sundaram Motors. Fujisaki said the City would be available in 1300cc and 1500cc capacities and five models are to be launched: 1.3 LXi, 1.3 Exi,. 1.5 Exi, 1.5 Exi-S, and 1.5 EXi-A/T. To begin with, HCIL has launched four models. 1.3 Lxi will be available at Rs 6.30 lakh, 1.3 EXi at Rs 6.83 lakh and 1.5 Exi at Rs 7.55 lakh, ex-showroom, in Chennai. Prices for 1.5 Exi-S and 1.5 Exi-A/T will be announced later. The 1500 CC models, Ex-i-S and EX-1-A/T, will be launched in Chennai in a couple of months. Fujisaki said there were no plans to introduce diesel versions of the car. The company
was confident that City, with its fuel efficient engine, will achieve fuel efficiency and that its petrol versions would sell well. The company has set a target of 20,000 cars for the financial year ending March 1999. HSCIL, which has invested Rs 450 crore, over the next six-seven years will increase it to Rs 850 crore. HSCIL has a paid-up capital of Rs 180 crore, while Rs 270 crore will come from ICICI and other financial institutions. A new stamping unit will be established near the Noida site. According to Fujisaki, HSCIL, which has achieved 53 per cent indigenisation, will target a level of 70 per cent in the next two or three years. The import content, in the Rs 6.30 lakh car, is around Rs 3 lakh and this is the basis for reckoning 53 per cent indigenisation. Seats, starter motors and small engine parts contributed to the indigenisation programme. HSCIL marketing director Y Nakamura said the company expects TN to account for 30 per cent of the premium segment sales. A study by an independent
automobile body revealed that the 1.3 L and 1.5 L version could give an average of 20.3 km per litre and 19.19 km per litre respectively, Nakamura said. He also said the parent company was sourcing pressing parts from Thailand, where the company's factory is being perceived as the mother plant for supplies to the Asian region. Besides Japan, Honda Motor Co has set up manufacturing plants in North America, Europe and Thailand (Bangkok). The strength of each country will be a part of its core strategy. Fujisaki said the price of City would not be cut to seek a better market share. The company, after studying the Indian market for three-and-half years, finalised the price of Honda City and expected the market to absorb the same. According to Sundaram Motors executive director KR Ragavan, HSCIL has made a major change in the way dealership is conceived and operated in the country. Instead of the usual dealership set up, the Japanese-led joint venture company has established the concept of branded
franchise dealerships called "Heads" (Honda Exclusive Authorised Dealers). Each HEAD operates under the "3S principle" viz sales, service and spares under one roof. "This requires each dealership to be large and calls for substantial investment in creating the infrastructure," Ragavan said. Ragavan, however, declined to disclose the investment made in the showroom and service workshop areas, saying it was "substantial."
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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