Honda launches new City sedan in India image

Honda’s Indian subsidiary introduced on Wednesday the new City sedan on the local market.

The new City is priced between 699,000 rupees ($13,400) and 1.02 million rupees ($19,570) and is powered by a 1.5-liter gasoline engine. The car will be sold in seven variants, with the first deliveries expected in January. 50,000 rupees ($950) cheaper than its predecessor, the new model is set to regain lost ground to rivals such as Hyundai and Volkswagen.

This is the second time in 2011 that Honda has reduced the price of the City in order to compete with rivals who are offering cheaper gasoline-powered sedans. In June, Honda cut the price of the City by up to 66,000 rupees ($1,270).

Demand for the City was affected in part because Honda doesn’t offer a diesel variant of the model. Diesel cars are increasingly popular in India as the government subsidises the fuel due to its higher influence on inflation than gasoline.

Honda sold 19,770 units of the City between April and November, way behind Hyundai, which sold 33,069 units of its Verna sedan. Volkswagen also sold more cars than Honda, with the Vento reaching 26,459 sales. Honda sales were also affected by auto parts supply shortages this financial year, caused by the Japan earthquake and the floods in Thailand.