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Honda losing out market share in Indian auto industry

Honda Siel Cars India Pvt. Ltd has been losing out on important Indian market share while the other car makers are making the most of the robust demand for new cars.

Industry analysts blame it on Honda’s ageing product portfolio. In the four months of the current year, Honda sales has declined by 2.7 per cent to 21,746 units, while the total sales of new car in India has gone up 30.8 per cent over the same period. Sales of most Honda models including Jazz, Civic, Accord and CR-V were affected badly, the only exception being the City which continued its good performance. Honda sold just 188 units of the Civic in April, which is down by 69 per cent over April 2009.

Jnaneshwar Sen, senior vice-president, sales and marketing, said, “The strengthening of the yen against the rupee has inflated the import bill on parts such as airbags, thus preventing competitive pricing.” The CR-V, a premium sports utility vehicle, is imported as CBU.

Honda had increased prices of its entire car range from Rs30,000 to Rs3.5 lakh in March 2009 where the CR-V saw the steepest price hike.

While its Civic model, the second largest by volumes after the City, has been facing stiff competition from newer models such as Chevrolet Cruze and Volkswagen Jetta, its compact car Jazz, has been badly affected by the price cuts in Hyundai i20 model.

Honda will, however, focus on expanding its product inventory. “Our top priority now is the small car,” said Sen. Honda plans to increase the number of dealerships from the to support the new launch.


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