Honda’s first small car for India, the Jazz, will make its first public appearance at the Tokyo Motor show in October this year. Expected to be launched in a finely tuned form in India to take advantage of the taxation structure, the product is most likely to come strapped with a diesel engine.
The new Honda Jazz is built to take on Swift and Getz. Masahiro Takedagawa, chairman and CEO of Honda Siel Cars India, has already implied that the company’s small cars would be positioned to fit into the lower excise duty bracket. Small cars with a certain specification of engine capacity and length attract lower tax of 16 percent as against 24 percent for bigger cars, as per the excise duty structure. The Jazz might come with a 1.5-litre diesel engine in order to draw excise benefits. Honda is traditionally known for pricing its product on the higher side. But auto analysts say that the Japanese manufacturer will have to change its stand as it treads into the compact segment.
PriceWaterhouse partner Abdul Majeed said that the B and the B+ segment cars do not give high margin. But according to him, to be able to make money in these segments, any auto maker would have to price its products aggressively to catch big volumes.
The Jazz is likely to sport a price tag of Rs 4.6-5.6 lakh to draw big volumes in the segment, given the competition from Getz and Swift. While Jazz will hit the Indian roads in 2009, another small car from the Honda stable, which is designed for the Indian market, will be launched in the country from that time on. This model would be launched one level lower in the B-segment and would rival with the likes of Hyundai Santro, Tata Indica and Maruti Wagon R.
The company’s second Indian car plant, which is coming up at Takapura in Rajasthan, would manufacture the next generation Jazz. The initial capacity of plant would reach 60,000 vehicles which will be more than tripled to 2 lakh units over time. Moreover, Honda’s second small car for India is also expected to be manufactured in the Takapura plant after its capacity is reinvented.