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Honda launches the Accord sedan in India

The Indian unit of Honda Motor Co, Japan's third-largest auto-maker, launched its popular sedan, the Accord, on Thursday, making it one of the early birds in a newly created Indian car segment.

The sixth generation Accord "is aimed at customers who have been driving C-segment cars for over half a decade and are now ready to upgrade", Teruo Fujisaki, CEO of Honda Siel Cars India Ltd, said in a statement.

The Accord, popular in the United States and Japan, is powered by a 2.3 litre petrol engine and its manual version is priced at Rs 1.495 million in Delhi.

It is the second car to be launched in India's D-segment that comprises cars priced from Rs 1.1 to 2.0 million after the Mercedes C-class.

Honda already makes two versions of its City model, which it launched in 1997 at its Rs 4.6-billion plant on the outskirts of Delhi and spent Rs 100 million adding facilities for making its new offering.

The new Accord, introduced internationally earlier this year, will have more than 30 percent local content, Fujisaki said at a news conference.

Honda officials told the news conference the company hoped to sell 2,500 Accords in the financial year ending in March 2002. They estimated the size of the D-segment at 6,000 to 7,000 cars a year.

India loosened its trade policy in April, compelled by a World Trade Organisation pact, and allowed firms to import and sell cars after paying import duty.

Since then, several auto firms have planned launches of larger saloons -- Mercedes Benz, its CLK, SLK and M class, Ford its new Mondeo, Opel its Vectra and Daewoo its Magnus, Nubira II and Lanos II models.

South Korean car firm Hyundai Motor's India unit will also launch the Sonata later this month.

To break even this year

Fujisaki said the company was also aiming to sell 11,000 of the City cars and expected to exceed breakeven volume of about 11,000 cars in the current year to March 2002.

It would also export the Accord to neighbouring markets in Bangladesh and Sri Lanka but had no immediate plans to launch car models in the smaller high-volume segment, he added.

India's nearly 600,000-a-year car market comprises a high volume entry-level small car segment where cars retail at below 300,000 rupees called the A-segment and a slightly higher priced B-segment comprising hatchbacks priced up to Rs 500,000.

The A and B segment combined make up nearly 86 per cent of sales. There is also a growing mid-size sedan segment, the C-segment, with cars at between half a million to a little over Rs 1 million.

India's overall car sales have fallen 6 per cent in April-May on the heels of a 7.5 per cent drop in the previous year to March.

The import plans of some auto majors were dented recently when India raised basic import duties on new cars to 60 per cent from 35 per cent, pushing effective duties to 119.65 percent from an earlier 85.33 per cent.

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