Honda To Launch City Car In Jan 98

Japanese auto giant, Honda, will launch its first car 'City' in the Indian market next month. "The first car is expected to roll out this month and it will hit the markets in mid-January 1998," Honda-Siel Cars India Ltd president and CEO T Fujisaki said here.

Priced in the premium segment of the market, 'City' will be powered by engines of 1300 cc and 1500 cc capacities and will have local components of upto 50 per cent initially.

Fujisaki, however, refused to divulge the exact price of 'City', saying, "You will learn about it soon," and added that 77,000 cars of the model have already been sold in Thailand.

The company has made a total investment of Rs 450 crore in its greenfield plant at Noida near Delhi and will have an installed capacity of around 30,000 cars, Fujisaki, who participated in the CEO's quality forum organised by the Federation of Indian Chambers of Commerce and Industry (FICCI), said.

The 'City' version, which is particularly suited to Asian conditions, is already popular in Malaysia, Indonesia, the Philippines, Taiwan and Thailand.

Honda has 90 per cent stake of the equity capital of Rs 180 crore of its Indian car venture, while its local partner, SIEL, owns the rest.

Asked whether the political uncertainty and instability prevailing in India will stall Honda's investment plans, Fujisaki said, "We have almost finished our investments for our auto project and the uncertainty will not affect us. But, we cannot say anything about the now."

He, however, made it clear that the company does not have any plans to introduce a small car or any other model for the time being.

Honda's global small car stable includes successful versions like 'Logo' and 'Life'. Though the Indian partner, Siel, initially had a 40 per cent stake in the auto joint venture, it was forced to reduce its holding following severe financial constraints. "The Indian partner has an option to buy back the 30 per cent stake it off-loaded in favour of Honda at any point of time," Fujisaki said.

Asked about the prospects of the 'City' model when the luxury car segment is facing a slump in the market, he said, "Of course, in the short term there is a slump. But the country has a long-term potential and we are not so pessimistic."