Honda City has raced to the top of mid-size sedan sales in August, beating the top seller for the last three months, the Hyundai Fluidic Verna. Here’s why this is such an important development in a market where petrol cars are not favored by buyers.
After January this year, the Honda City lost sales at an alarming rate, from about 5,000 units in January to 1,800 in May, slumping from the best-seller spot to the second-last spot, only above the Fiat Linea. But in August, the City sold 5,819 units, which is almost a 42% jump over the previous month. Also read: Honda City diesel to be launched by 2014
What changed, of course, was the price cut in June, when the City prices were slashed by Rs 66,000. As a result, sales picked up in July to more than 4,000 units, just below the newly launched Hyundai Verna and grew further in August.
Right-pricing of petrol cars
Honda axed prices of the Honda City in mid-June by up to Rs. 66,000, and that was all it took to make the car seem immense value for money. The City has always been a great car to drive, has a peppy engine and is loaded with safety equipment. Read more: Owner Review: Honda City
The other car maker which has worked hard to improve the value-for-money proposition has been Volkswagen. Volkswagen’s low-interest rate (at 6.99%) offering on the Vento petrol has also brought in some success, as sales have been steadily creeping up. Volkswagen dealers are also throwing in freebies such as seat covers, parking sensors and music systems on lower-spec models to get them to move out of the showrooms.
And it looks like that strategy has worked a bit for Volkswagen too as Vento sales are up 6% compared to July at over 3,000 cars, with the Vento retaining its No.3 spot. Most other cars dropped sales volume in August compared to July.
In August, not only did the Verna cede the number one spot to City but it also dropped sales by almost 11% compared to the previous month. Long waiting periods for the Hyundai Verna are beginning to tell in some flagging interest in the car. In some Delhi dealerships, waiting period for the diesel variant is as high as 9 months and about 2.5 months for the petrol Verna.
Among the biggest losers, though, are the Fiat Linea and the Ford Fiesta that was launched in July. Fiat sold barely over a 100 Lineas, while Ford sold only about 400 Fiestas. The Fiesta in fact dropped sales over the previous month of 781 units.
Interestingly, the Fiesta Classic picked up sales to over 1500m units from 1200 plus units last month. The new Fiesta is a great car to drive and loaded with safety equipment as well as convenience gizmos, but buyers don’t think that the slight premium on the car compared to the Verna or Vento is justifiable.
Sales of the Maruti SX4 have also been hit by production problems due the ongoing unrest at its plant in Manesar. SX4 sales are down 18% to 1,893 units in August.
So, considering the Honda City lacks a diesel version, do you think it is the best proposition in the mid-size sedan market? Share your reasons!
Mid-size sedans July-August 2011 sales
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(Source: Team-BHP, Industry data)