11 June 2009;business-standard.com:New Delhi: Honda Siel Cars launched its first small car — the Honda Jazz — in the capital today. The Jazz falls in the super premium category of the A2 segment which, until now, was occupied by Skoda’s Fabia. Available in three variants, the Honda Jazz is priced in the range of Rs 6.98-7.33 lakh. Market researchers say this super premium price tag, which is around Rs 2 lakh more than Maruti’s Swift and Ritz (also A2 premium segment), occupies a niche segment which sells few numbers. According to one estimate, of the 6,000 units of Fabias sold in the financial year 2008-09, less than 10 per cent would have come from the top-end Fabia compact cars, which cost around Rs 7.39 lakh. “We expect the customer of a Jazz to be an owner of an executive car looking for a second car, which will probably be a compact car. It’s unlikely the Jazz customer will be a first-time buyer. It’ll take time for this premium segment to gain acceptance. We are willing to wait for three-four years for this to happen,” Honda Siel President and CEO Masahiro Takedagawa said. The Jazz, which shares Honda City’s platform, is expected to sell about half as much as Honda City, of which about 2,500 are sold each month. Industry executives say the Honda Jazz’s numbers will remain subdued due to two reasons. First, traditionally, the Indian customer has always preferred a car with a boot. “Since the customer cannot afford a sedan, the choice gravitated towards a hatchback. At Rs 7 lakh, the customer has a range of options from the mid-size cars, beginning with Maruti’s Dzire, the price of which begins at Rs 5.36 lakh,” said one analyst. The other concern, which the company has to address, is the limited range of engine options. According to one market researcher, the petrol version of the Jazz may not sell that much in the market. “Despite all the bells and whistles the Honda Jazz may incorporate, it lacks a diesel engine, which makes the price tag of Rs 7 lakh hard to justify,” said one industry analyst. Maruti’s diesel-powered Dzire models cost between Rs 6 lakh and Rs 7 lakh. Honda Siel plans to launch another small car in the next two years.
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