Amaze to set pace for Honda’s diesel drive in India

 

Honda launched the Amaze sedan in Thailand on Friday, with India launch scheduled within the next six months. This strategy is similar to the one adopted for the Brio premium hatchback, which was first unveiled in Thailand two years ago, before making its way here.

The significant part of the Amaze, though, is that it will set the pace for Honda’s diesel agenda in India. The Japanese automaker has been losing out to rivals in recent years thanks to the huge price differential between petrol and diesel. This stems from India’s inability to deregulate diesel prices which has put pressure on the company.

With the Amaze entry-level sedan, Honda will finally have a diesel option to offer in a segment where prices typically start from a little over Rs 5 lakh (for petrol) going all the way to Rs 7.5 lakh. The higher price for the diesel version will hardly be an issue with buyers who still prefer paying more for a vehicle and then making the most of cheaper fuel during its lifetime.

As for Thailand, the Amaze will join the Brio hatchback in the Eco Car programme where the Government has offered a host of incentives to automakers as part of the drive towards cleaner emissions. The other Japanese players participating in the Eco Car plan include Nissan, Mitsubishi and Suzuki with Toyota expected to join the parade in the latter part of next year.

According to an auto industry veteran, India’s robust vendor base has the right skills which could be put to good use for Japanese carmakers’ projects across ASEAN. Thailand and Indonesia, he adds, will be the first part of a larger script which could soon include Vietnam, Malaysia and the Philippines.

From Honda’s point of view, growing its share in India will be top priority given the recent setbacks from the tsunami in Japan and the flooding in Thailand which disrupted supplies.

Sources say the Rajasthan factory could be the powerhouse of the future where large scale exports of engines and components will be a reality over the next few years.

It also remains to be seen if Honda will follow Toyota’s Latin America route where Brazil will be a key hub for the Etios after India.

As a top industry observer puts it, “There is no telling what will happen tomorrow. Nobody expected the Brio to be exported from India to South Africa.”