Latest Car News in India

Saturday, March 31, 2012

By Manoj Kumawat

Honda City diesel expected soon

Honda, the Japanese car maker, has issued a rights issue and has raised money worth Rs 1200 crore for its Indian subsidiary Honda Siel Cars. Notably, Honda India is on a major expansion drive and it is soon have its second plant at Tapukada Rajasthan fully functional along with the set up of diesel engine unit. With this, soon three cars, Honda City, Honda Civic and Honda Accord are expected to have their diesel models available in India. Currently, all the Honda cars in India are petrol powered and due to the rise in petrol prices, the sales of these cars have gone down.

Honda City Pictures

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Recently, there were reports that the Indian partner in the joint venture Shriram Group wishes to sell its 5 percent stake in HSCI to Honda. Now that HSCI has issued rights issue and has raised Rs 1200 crore, it is expected that the process of bringing diesel Honda cars to India will hasten. Besides, further investment in the Tapukada plant will enhance the production capacity of Honda India.

Honda City Pictures

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Significantly, Honda has posted a net loss of Rs 212.83 crore in 2010-11 following lack of supply of components from Japan due to the earthquake and later Tsunami. This led to production outage and a net loss for the company in India and elsewhere as well. It is due to this that the launch of Honda Brio small car was delayed and the facelift version of Honda Jazz also got delayed.

Honda City Pictures

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Now that Honda has all the things going as planned, expect that its best selling car in India will debut the diesel engine soon. This will not only improve its sales in India but will also help it stand in competition with its rivals such as Maruti Swift Dzire, Toyota Etios, Ford Fiesta, Hyundai Verna Fluidic and others including Skoda Rapid.

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