Honda to expand network in tier-II and tier-III cities

Honda Siel Cars India (HSCI) is expanding its sales network to India’s tier-II and tier-III cities to reach a wider audience ahead of the Brio’s launch this festive season.

Currently, HSCI has 125 sales centres in 77 cities across India the expansion of their sales network to these cities will result in a marginal growth in sales figures and overall profits. Also read: Honda Brio launched in Thailand, India launch approaches

“Brio is important for the company, as with it we intend to widen our customer base. We want to target upcountry customers with this car,” Seki Inaba, Marketing Director of HSCI was quoted as saying by the Business Standard.

HSCI has opened dealerships in Ambala, Mandi, Rohtak and Coonoor. The company is planning to open 25 more outlets across the country in the next 12 months. Also read: Honda City diesel to be launched by 2014

“At present, nearly 50 per cent of our sales come from the top seven-eight cities such as Delhi, Mumbai, Kolkata, Hyderabad,” Jnaneswar Sen, senior vice-president (sales & marketing), HSCI was quoted as saying.

Sen added that the company sees that the potential of sales from rest of the country is huge. Talking about the higher prices of Honda cars in India, Inaba has told that HSCI wants to remain distinctive in the products it offers.

The Brio will be the first mass car by the company as it is expected to be priced around Rs. 5 lakh. The car will have 80% localization and will be manufactured at the company’s Greater Noida facility in U.P.

The India-bound Brio was launched in Thailand this March 2011 and is priced ranging from 399,000 – 508,000 Thai Baht (i.e., Rs 5.96 lakhs – Rs 7.58 lakhs). The Brio is available in 5 colours, Fresh Lime Metallic, Taffeta White, Cerulean Blue Metallic, Alabaster Silver Metallic and Crystal Black Pearl.

The Honda Brio is a very compact small car measuring 3.6 m in length, 1.68 m in width and 1.475 m in height. The car has impressive front design with a squashed grille and swept back headlamps. The Brio’s rear design is a little peculiar with a low-set rear windscreen glass and a triangular tail lamp assembly.

Honda Brio is powered by 1.2 litre i-VTEC petrol engine (Euro IV compliant) that churns out 90 hp of maximum power and is mated to a 5 speed manual. Honda Brio returns a fuel economy of 20 km/litre (5 litres per 100 km – Honda’s claim).

The company has also hinted that it would launch a small car priced below Honda Brio. Hence, HSCI is making the right move by opening showrooms in tier II and tier III cities, where there is a huge demand for small cars.

Sales and production low for HSCI

Sales of HSCI cars have not been good in the past few months. This might also be a reason for the company’s focus on tier II and tier III market besides its small car launch plans. HSCI has registered a 43.76% decline in sales April 2011 sales. Meanwhile, due to tsunami and earthquakes in Japan in March, 2011 the company has announced a production cut of roughly 50% in India due to gaps in supply chains as some of the critical auto components are imported from Japan.