Honda bets big on the new Amaze
The Japanese auto major expects the new design and price tag to drive volumes, steer the car away from taxi use to personal use
Japanese car maker Honda wants the new generation of Amaze compact sedan to become its third growth leg in the Indian market besides the City midsize sedan and the WR-V compact sports utility vehicle. Launched on Wednesday with an entry variant price of ~559,990 (for petrol trim), Honda is confident that the new Amaze will help it corner a bigger share in the Indian compact sedan market where rival Maruti Suzuki’s Dzire sits on a near 60 per cent share of the market. Dzire begins at a comparable price of ~ 556,000 (ex-showroom Delhi).
“We have got only positive reviews so far. I believe it is going to be a game changer for us and replicate the success of City. It may even overtake the City in volumes,” said Rajesh Goel, senior vice president and director (sales and marketing) at Honda Cars India.
A compact sedan has in the past been dismissed by auto enthusiasts, because they see it as a vehicle slapped together by attaching boot to an existing hatchback model. That is how the first Maruti Suzuki Dzire came into being (after the Swift hatchback). The story is similar for the first generation Amaze that hit the road after the Brio.
Goel claims that Honda has turned things on its head by launching the sedan first. “I think we are the first company to have started with the sedan. That is why we have a fullfledged sedan and not just a boot attached to a hatch. This platform has been developed for India. The sequence of thought has changed,” he said.
Maruti Suzuki launched the Dzire in May last year and brought the Swift in February this year. But the Amaze is unlikely to be followed by the Brio, a model that sells just 400 units a month and is one of the lowest volume products in the small car segment. Goel says it is not necessary for a car maker to operate in all segments and Honda will focus on the segments where it has an advantage and can add value.
Honda hopes the Amaze
( L to R) Gaku Nakanishi, president & CEO, Rajesh Goel, senior VP and director, Honda Cars India and H Yamaguchi, project leader for Amaze at Honda Bangkok, at the launch event in New Delhi
will appeal to two new kinds of car buyers besides the compact sedan customers. “I believe that the first time car buyer will consider the sedan due to its looks. The compact SUV buyer will also find this car appealing. A SUV has greater appeal but the look and design should pull in some buyers who may have originally considered a small SUV. At that price point, a lot of cross shopping takes place,” said Goel.
Launched in 2013, the first generation of Amaze clocked a cumulative volume of 257,000 units. The company expects a lot more from the 2018 version as India is the first country among all Honda markets to produce and launch the new Amaze. It is also the first time that Honda is launching a diesel CVT (continuously variable transmission) technology anywhere in the world.
The company has also taken into account the post-sales experience and Goel said, “It is going to have the lowest maintenance cost. The life cycle of parts is much higher and that reduces maintenance cost.”
The second generation Amaze sets a new benchmark in Honda’s localisation in the country with 96 per cent of components by value being sourced locally. The outgoing model had a localisation of 94 per cent and the number is identical for the City and WR-V.
The outgoing Amaze was popular in the taxi and fleet segment, which believe experts, impacted the image of the brand. Honda is being cautious this time around. “This is a beautiful model. I would like to keep selling to personal buyers. I don’t intend to sell to fleet owners to begin with,” said Goel.
India, being a key strategic market for Honda, has been specifically chosen to lead the launch. The Amaze is also expected to help Honda India compete with Tata Motors
(Honda lost the fourth position in Indian car market to Tata last year). Amit Kaushik, managing director for India at automobile consultancy, Urban Science, said that attractive pricing and the brand loyalty that Honda has built for itself in the country will help the model score over competition.