Honda Amaze: A win-win option

As we all know it has been the worst year in a decade for the auto industry but with the new entrant the Honda Amaze it seems things will turn out to be positive for the auto industry. Honda Amaze the new entry level sedan is priced at Rs.4.99 lakhs for the petrol variant. For the first time in India they have introduced the diesel variant with best mileage in the category and improved engine performance. This holds better opportunity for Honda than Maruti Dzire on one front that Honda has limited reach with only 150 sales outlets against Maruti which has 1200 outlets.

Will Honda Amaze play a game changer or not here are few indications on this basis:

Honda is the hallmark of premium cars in India with its City and Accord models but the number        has gone down significantly. Honda’s market share has slipped from 5.52% to 3.86% almost six years ago to fiscal year 2013.Inspite of the strong Honda branding it has struggled to launch the right product at the right price in India.

Amaze should be a game changer for the company. Also, with the big shift in the approach with a diesel variant Honda is now ready to take on market leader Maruti Dzire. Industry experts expect Amaze will sell between 3,500 and 4,000 units every month in the near future.

With Honda Amaze Honda has not only tried to trim the costs in India but also tried to connect better with the Indian consumers by launching ad campaigns in regional languages with the tagline "Badle Aapki Duniya" ("Changes Your World").

For the industry it has not been a good fiscal year with the  total sales dipping at 7% over a year ago to 1.89 million units.The auto industry saw 20-plus launches every year but 2013 will see very few model launches. In that context, Amaze stands out because only Ford Eco Sport is slotted for a launch this year.

According to the experts it is unlikely that Amaze will turn the tide it will at its best add 50,000-odd units to the overall 2 million annual sales. But it should certainly help turn around the sentiment something the industry badly needs.

 Though, Honda Amaze debuts in a segment which already has Maruti Dzire, Tata Indigo and Toyota Etios; the only competitor that matters is Dzire with the sales of 18,000 units a month and covers over three fourths of this segment.

  Amaze is well placed to creep into Maruti Dzire's dominant share. However, some experts see an unlikely side effect that Amaze will eat away Honda City sales.  It is expected that Amaze will expand the entry-level sedan segment that might lure compact buyers to upgrade their segment.

The entry-level sedan Honda Amaze is uniquely made for Indian segment. It is a compact car in every way with a small boot to it. It owes its origin to sub-4 metre cars. For a car buyer, the sub-4 metre offers advantages of a compact with sedan-like comfort at a slightly higher price. The segment is a win- win for buyers as well as for Honda.