labels: passenger cars, honda motor company, general motors india, marketing - general, automotive
Race to rule the roostnews
With GM rolling out th
14 August 2003

Mumbai: Honda Siel's target of becoming the market leader in the upper mid-size segment by 2006-07 was an attainable one till a few months ago. That was before the launch of the Chevrolet Optra from the stable of General Motors India (GMI) last month.

The Chevrolet Optra, originally the Nubira from Daewoo Motor, is GMI's much-publicised entry vehicle into the mainstream Indian market. On all fronts the car has everything going for it.

Designed by Pininfarina, a well-known Italian design house, the Optra has superb looks and styling, comes with a powerful engine and has luxurious interiors. And all this comes at a price that is likely to give competitors sleepless nights.

Within two weeks of its launch, the Chevrolet Optra has sold over 1,000 cars even though the company had initially targeted to sell around 1,000 cars in a month. The company is now planning to increase the Optra's production to meet the surging demand.

GMI seems to have realised the price value equations prevailing in the Indian market and has priced the Optra, on all counts a premium D-segment offering, in the Rs 8-9 lakh bracket, competing with cars like the Toyota Corolla, the Skoda Octavia and the Honda Siel.

While the sales of the Corolla and the Octavia may get affected from the launch of the Optra, the car most likely to feel the heat of competition is the Honda City.

The Honda City, currently one of the top-selling cars in the upper mid-size car segment, is available in two models: the City Vtec and the City 1.5 Exi. Compared to the Optra, the fully-loaded variant of the City is under-powered, has a smaller engine and is actually smaller in size as well.

The Chevrolet Optra is powered by a 1.8-litre DOHC engine that delivers 115ps of power, while the Honda City Vtec comes with a 1.5-litre engine that can generate 100 bhp of horsepower.

Please refer to the figures given below:
TECH SPECS
HONDA VTEC
CITY 1.5 (EXI)
CHEVROLET OPTRA
Body
Three box 4-door saloon
Three box 4-door saloon
Three box 4-door saloon
Dimensions; front-track
1450mm
1450mm
1480mm
Kerb weight
985kgs
985kgs
1265kg
Overall height
1395mm
1395mm
1445mm
Overall length
4270mm
4270mm
4500mm
Overall width
1690mm
1690mm
1725mm
Rear track
1455mm
1455mm
1480mm
Tank capacity
45 litres
45 litres
60 litres
Brake horsepower
100bhp @ 6500rpm
100bhp @ 6500rpm
115PS @ 5800rpm
Displacement
1493cc
1493cc
1799cc
Layout
4-cylinder, in line-front; transversely mounted
4-cylinder, in line-front; transversely mounted
In-line 4-cylinder, 16-valve DOHC, MPFi
Torque
13.5kgm @ 4700rpm
13.1kgm @ 4600rpm
156Nm @ 4000 RPM

All said and done, the price will be the real clincher in the success sweepstakes. That said, the City in all its variants is pricier than the Optra and this fact taken along with the engine size and power may work against it.
On road prices (Rs)
Chevrolet Optra
City 1.5 (Exi)S
Octavia 1.9 Tdi-ambient
Corolla 1.8e
Delhi
788956
877976
1099742
1080000
Mumbai
824244
959162
1141323
1174815

The Optra also beats the Corolla and the Octavia on the price front but on other counts the Corolla and the Octavia are comparable to the Optra. The Toyota Corolla, the top-selling car globally, comes with a 1.8-litre engine that generates 125bhp, while the Octavia, which is backed by the superb engineering reputation of the Skoda, has a 1.9-litre engine that can generate 111bhp.

Specifications

Chevrolet Optra

Corolla 1.8 E

Octavia 2.0 Ambient

Kerb weight

1220kgs

1160kgs

1330kgs

Overall height

1445mm

1500mm

1455mm

Overall length

4500mm

4530mm

4507mm

Overall width

1725mm

1705mm

1731mm

Tank capacity

60 litres

50 litres

55 / 7 (reserve) litres

Brake horsepower

115PS @ 5800RPM

125bhp @ 6000rpm

111bhp @ 5100rpm

Displacement

1799cc

1794cc

1984cc

Fuel

Petrol

Unleaded petrol

Unleaded petrol

Layout

In-line 4-cylinder, 16-valve DOHC, MPFi

4-inline

4 cylinder in line

Torque

156Nm @ 4000RPM

158Nm @ 4200rpm

168.80Nm @ 3000rpm

Valve gear

4 valves per cylinder

4 valves per cylinder, DOHC, VVT-I

SOHC, 2 valves per cylinder

Possibly the only front where the Honda City could steal a march over the Optra is in fuel consumption. This factor assumes mammoth proportions in India and was one of the reasons why the Fiat Palio was not as big a success as expected.

With a low kerb weight of 960kgs the City gives up to 12 kms per litre in city driving. The Optra weighing 1220kgs might go heavy on fuel, which might go against it in the long run. Initial sales figures apart, the Optra needs to sustain such numbers consistently before it can well and truly be pronounced a success.

In the recent past, the Honda Siel has been making the right kind of noises. These include plans of introducing an upgraded City by the end of the year and a cut in the price tags of both the Accord and the City.

The company has invested Rs 200 crore over a period of three years (from 2001) on upgrading its existing models, which includes upgrading the City.

Last month the Honda Siel said it planned to reduce the prices of both its models the City and the Accord and also that it will increase the local component in its cars that will enable it to reduce prices again later.

In June this year, the Honda Siel launched the seventh generation new-look Accord priced between Rs 14.7-15.7 lakh, pitched against premium cars like the Toyota Camry, the Ford Mondeo and the Hyundai Sonata. In January next the company plans to again launch an improved version of the Accord, which will sport a 3000cc V6 engine.

Honda has a market share of 15 per cent in the premium D segment, which it hopes to increase to 25 per cent share in the next two years. The company is targeting sales of about 20,000 cars this year. Last year the Honda Siel broke even with revenues of Rs 1,000 crore by selling around 13,300 cars comprising both the City and the Accord.

Future plans include starting a second shift at its Greater Noida facility. Recently the company phased out the highly under-powered 1.3-litre variant of the City and may also phase out the 1.5-litre variant in the near future though it is not confirmed.

Honda, which has completely knocked down assembly operations of the City and the Accord with indigenisation levels of 75 per cent and 25 per cent, respectively, has a total installed capacity of 30,000 cars per annum on a two-shift basis.

The size of the premium car market is about 85,000 units and is expected to increase to 1 lakh cars by the end of the year.


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