Amaze Belatedly Adds Honda to India’s Diesel Market

MUMBAI – Honda is a latecomer to the diesel market in India, but the auto maker hopes to catch up quickly with its Amaze compact sedan.

Sales of the Amaze, based on the Brio hatchback, launch in April. The car will compete in price and performance against Maruti Suzuki’s Swift Dzire, Tata’s Indigo CS, General Motors India’s Chevrolet Sail CS and Mahindra & Mahindra’s Verito CS.

The diesel employs the high-efficiency Earth Dreams technology featured in two gasoline-powered Honda powerplants honored in Ward’s 10 Best Engines list for 2013. A 1.6L diesel earmarked for cars sold within the European Union and Thailand’s eco-car segment has been re-engineered to 1.5L to qualify the Amaze for India’s 10% small-car tax bracket.

In addition to the 1.5L, 4-cyl. DTEC diesel generating 90 hp, Honda will offer a 1.2L i-VTEC gasoline engine. The diesel achieves fuel efficiency of 58.8 mpg (4.0 L/100 km), according to Honda.

The auto maker has discontinued production of the Jazz compact cross/utility vehicle, but may re-launch it next year with the 1.5L diesel and a more competitive price. Jazz sales have flagged in India in part because of its high price. The same diesel also may be used later in the City sedan.

A third manufacturing line recently added at Honda’s Noida plant in New Delhi is flexible; it can be used to produce diesel or gasoline engines. The auto maker plans to export engines, as well as cars and components, to Southeast Asian countries including Vietnam, Malaysia and the Philippines.

The sedan’s unconventional styling is derived from the Brio, but otherwise it has been redesigned from platform to roof. It is longer, wider and taller than the Dzire and provides more cabin space.

The Amaze isn’t arriving a minute too soon in India, where the lack of a diesel, small car or compact light truck shrank Honda’s market share from 3% in 2009 to 1.6% in 2011, Ward’sAuto data shows. The new Brio bumped the auto maker’s share up to 2.2% in 2012, only to slip to 1.8% in January.

Honda is withholding Amaze pricing until sales launch. Prices range from TB454,000-TB521,000 ($15,345-$17,610) in Thailand, while competition in India likely will slot the sedan in the range of Rs500,000-Rs750,000 ($9,230-$13,900).

In preparation for the Amaze, Honda is extending its dealer network to Class II (50,000-100,000 population) and Class III (20,000-50,000 population) cities.

Honda enters India’s diesel market as the price gap between gasoline and diesel fuel narrows and uncertainty persists about whether the government will raise taxes on diesel cars.

Offering diesel-powered models still might not make the auto maker sufficiently competitive. Honda needs small compact cars and light trucks in the lowest tax bracket to make a noticeable turnaround.

The only light truck currently in Honda India’s portfolio is the CR-V premium CUV. Prices range from Rs2.16 million to Rs 2.6million ($40,000-$48,000).