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Now Honda is planning a small car - Views on News from Equitymaster
 
 
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  • Aug 12, 1999

    Now Honda is planning a small car

    Slowly but surely the small car segment is getting crowded. After Daewoo (Santro), Hyundai (Matiz) and TELCO (Indica), it is Honda's turn to make a foray in this segment. Honda Motors plans a recreational vehicle (RV) and a small car, through its JV with Honda Siel Cars Ltd.

    In May 1999, the passenger car segment posted 18% production growth and 16% sales growth, over the corresponding period last year.

    Sales growth in this segment has witnessed buoyant growth on account of rising sales of new entrants like Indica, Matiz and Santro. The 3 accounted for nearly 17% of car sales in April-May 1999. Even Hindustan Motors has witnessed rise in car sales in this period.

    Maruti was the laggard in the car segment with 13% growth in April-May 1999, while the segment clocked 35% growth during the same period.

    The car segment is expected to witness significant growth in view of production increases planned by TELCO, Hyundai, and Daewoo. According to CMIE's projections, the segment looks set to grow by 20% in FY2000.

    Honda, if and when it comes out with a small car, will have invest aggressively to build a product, to beat the existing ones, on price as well as quality. Already, TELCO, Maruti, Hyundai and Fiat have slashed prices of their products to lure customers. TELCO's Indica already has orders till FY2000.

     

     

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