Honda may boost Amaze output on heavy bookings

Amaze compact sedan has seen bookings cross the 20,000-unit mark in first 30 days of launch.

Written by Roudra Bhattacharya | New Delhi | Published: May 2, 2013 1:04:40 am

The biggest success for Honda Cars in its 16 years of operations in India,the Amaze compact sedan has seen bookings cross the 20,000-unit mark in the first 30 days of launch. This indicates a strong favour in the market for Honda’s new range of diesel models. In the next three years,the new Jazz and City,apart from a new SUV and MPV,will all be launched with the same 1.5 litre i-DTEC diesel engine.

The current order backlog means that almost four months worth of production of the Amaze is sold out — the company is making about 4,500 units a month. Certain diesel variants of the Amaze command a waiting period of close to six months,as checked by FE with some dealers,though the company said that the average waiting is about four months for diesel variants and two months on petrol. The Amaze was launched at an aggressive starting price of Rs 4.99 lakh on April 11,taking on segment leader Maruti Dzire.

“We are very happy with the strong demand,but there is a risk of having a huge waiting period as customers don’t wait for more than a few months and can choose rival’s products,” a company official said.

Though Honda faces a capacity constraint,it is considering increasing monthly output for the Amaze to around 5,500-6,000 units at its Greater Noida plant,which makes about 10,000 cars a month across all models. This is before the plant at Tapukara,Rajasthan starts production in early-2014,doubling monthly output to 20,000 units.

“We have to allocate adequate capacity for other models as well. We would like to wait for about two months to see how the demand sustains for the Amaze and then look to increase output. The bigger challenge will be for the suppliers who may not be able to ramp up as fast,” the official said.

The success of the Amaze in a car market witnessing the sharpest slowdown in 12 years shows that there is enough customer appetite to buy good products,an analyst said. Other models that have witnessed a similar spurt in demand in recent times include the Renault Duster,the Mahindra XUV500 and the Maruti Dzire.

The strong success of the Amaze scripts a speedy turnaround story for the fortunes of Honda,which have faltered in the past few years because of the lack of a diesel engine and mass-focussed models,apart from production issues.

Honda’s market share in passenger vehicles had slipped to 2.07% in 2012 fiscal,from 4.05% in 2008 fiscal. However,the company made a comeback in 2013 fiscal by gaining market share to 2.73% on the back of price cuts for the Jazz and City models,and rising demand for the Brio compact. In 2013 fiscal,Honda Cars’ volumes grew 35% at 73,483 units.

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