What sale strategy will Honda adopt in town areas

The car industry in India has not witnessed impressive profits in the past years, and the vehicle buying power in urban parts of the country has reduced considerably. The lower than usual buying power is contributed by steep hikes in fuel and commodity rates. Auto firms are now trying their sale luck in rural areas; the sale structure in rural India has risen considerably over the years. At one point it was 28%, a huge leap from 8 to 9% recorded at a particular period.

Majority of Honda’s sales are situated in Tier III areas, which include Asansol, Mathura, Kollam and Tirupai. The company does not have grand dealership holdings in major and Tier 1 cities. On the distribution of sales in various segment, the Vice President of the company, Jnaneswar Sen commented, ‘’about 40 to 50% of sales come from Tier III towns, and the buyers from rural marker can be anyone from farmer to real estate agents who build holiday homes.

The main goal according to auto firms is to cater to customer needs and requirements. Customer satisfaction levels should be the first notion and then expectations and sale outputs. This philosophy should be used in dealerships, companies and even between the interaction of distributor and buyer.

Recession has taken a toll on sales in India, and most auto firms are affected, the situation is the opposite for Honda Cars. The company has strategized its products effectively. The launch of Amaze in 2013 April has set off sale sparks for Honda, and has recorded profits continuously till today. It has been about ten months post the launch of the car and Honda has sold over 1, 00,000 pieces of Amaze.

Amaze was a sought after model months before launch, and the standout feature is the best-in-class 25.8kmpl mileage rendered by diesel car and advanced iDTEC and IVTEC engines built with ground breaking Earth Dreams technology and class rending boot volume of 400 liters. The petrol car is highly fuel efficient as well and moves with a mileage of 18kmpl.

The strategy adopted by Honda with Amaze has done wonders for the company, and Honda has incorporated Amaze identities into its recently launched City model. The new City is the fourth gen model, and is not a progression of its predecessor, but an evolutionary launch. Just like Amaze the car is equipped with 1.5 liter an iDTEC and iVTEC engine which offers phenomenal mileage of 26kmpl.

Honda has noted a remarkable 123% growth in Feb 2013, and most of the profits are contributed by City and Amaze, imagine the grand impact. About 7213 pieces of City and 6030 units of Amaze are sold. The City is draped with advanced design technologies called Sleek Cross Motion and Exciting H design, and its fiercest rival is Hyundai Verna. The City has overshadowed the dominant posh sedan stance of Verna with greater sale outputs.

Honda is keen to expand its dealership horizons particularly to metro based cities, with powerful models like City and Amaze on the run Honda has nothing to lose.  There are new Honda models to look forward to, Honda Mobilio MPV and Vezel SUV. It will be interesting to observe the sale structure of Honda post the launch of the mentioned forthcoming models.