Car prices seldom go downwards and when you have Japanese automaker Honda in the question, it never does. But competition is a good thing and the upper end of the C-segment is a very good example. The Honda City which was the king pin of this segment all of a sudden started to loose its market share courtesy the Volkswagen Vento, Maruti SX4 Diesel and the Hyundai Verna Fluidic. With Ford announcing the 2011 Fiesta, things were set to get worse. Why worse? Because the Honda City is the only car in this segment which doesn’t have a diesel variant. The company had no option but to revise the prices on all its variants with a price cut of upto Rs. 66,000/- Honda attributes this 6% price cut to their cost reduction efforts in the supply chain and manufacturing. Our question is, why did it take so long to implement these new methods, or is it just pure coincidence with the dwindling sales of the City?

“Our R&D function in India (HRAP-I) started working on localization and cost down activities for our volume models from year 2009. In anticipation of bigger volumes resulting in economies of scale from the second half of current year, we have achieved considerable cost reduction and are happy to pass on the benefit to the customers with immediate effect. The Honda City would now start from Rs 7.49 lakhs (ex showroom Delhi),” Mr. Jnaneswar Sen, Sr. VP – Sales and Marketing, Honda India, said.


2011 Honda City Revised Prices (ex-showroom, Delhi) : –

Price Change : Summary
W.E.F : 14 June 2011
TypeEx-Showroom (Delhi)
Current New Diff
CityEMT8,15,0007,49,000(-) 66,000
SMT8,64,6008,19,600(-) 45,000
VMT9,09,8008,64,800(-) 45,000
VMT Exclusive9,60,9009,16,900(-) 44,000
VAT9,82,0009,37,000(-) 45,000
VAT Exclusive10,33,1009,89,100(-) 44,000

[box type=”alert”]The Honda City has always commanded a good resale value, but with these price cuts, will it hold its value like before?[/box]

[box type=”info”]Just recently Volkswagen announced a price hike of the Vento.[/box]