New Delhi: Honda Cars India Ltd—a wholly owned subsidiary of Honda Motor Co. Ltd—has decided against introducing any new version of its globally popular premium hatchback Jazz in India. Instead, the firm will focus on its compact utility vehicle WR-V—made on the same platform as Jazz—and a new variant of its once-popular compact sedan Amaze for a launch later this year, two people aware of the plans said.

According to one of the people mentioned above, the firm will also bring the next-generation Honda City—its popular mid-size sedan—by 2020 when the Bharat Stage VI emission norms are introduced. It will be made in Honda Cars’s Greater Noida factory, as opposed to the Tapukara unit in Rajasthan, where it is currently manufactured.

Honda relaunched the new version of the Jazz in India in 2015 but, after an enthusiastic start, sales started to decline steadily in light of tough competition from Hyundai Motor India Pvt. Ltd’s Elite i20 and, later, Maruti Suzuki India Ltd’s Baleno.

In April to February of FY18, Jazz sales declined 13.8% to 24,995 units following increased competition. In the beginning of the fiscal, the firm made some recovery on back of renewed customer interest in the car.

Honda’s new compact utility vehicle WR-V and a refresh version of City. Sales of both have also started to decline in past few months. In the same period, sales of Honda City were down 0.4% to 51,482 units, while those of WR-V stood at 43,612 units.

Honda WR-V was launched in March 2017, and so the year-on-year comparable figures are not available.

“As a policy, we do not comment on future products. However, we wish to clarify that each model in our line-up has a specific role to play in our business. Jazz is one of the key products in the HCIL portfolio and India is currently the largest selling country for Jazz in the Asia Oceania region. WR-V and Jazz cater to different sets of customer profile, hence our focus will be on both models," the company said in an email.

A Jazz facelift was showcased by the parent firm at the Frankfurt Motor Show in 2017. “Honda has internally decided not to bring the new version or variant of Jazz in India since the product never managed to do well in the market. The company, though, will focus on WR-V going forward since compact SUVs have been well accepted in the market and the product also did decently well, compared with any other new product from Honda in recent years," said the first person mentioned above.

Apart from that, Honda Cars India has also devised a strategy to manufacture its smaller offerings like Jazz, WR-V, BR-V and the coming Amaze at Tapukara plant. The bigger cars, such as the City or the upcoming Civic sedan or CR-V SUV will be manufactured or assembled at the Greater Noida facility.

Also, in order to expand its market share in the passenger cars segment, the Japanese firm will introduce the next-generation (a full model change) City—its most successful offering in India—in 2020 and the manufacturing will be moved to Greater Noida, according to one of the two people mentioned above.

“Both our plants have flexible manufacturing capabilities; hence, the model-wise production is decided depending on the capacity availability. As mentioned, we will not be able to comment on any future product details," the company said in response to an email.

Honda Cars India has been going through a rough patch as sales declined in the past two fiscals with new products such as Jazz and BR-V failing to make a mark.

The sales of Honda City also declined due to increased competition from Maruti Suzuki Ciaz.

The company started FY18 on a better note, with the refreshed versions of City and WR-V, but sales declined once Hyundai introduced the next-generation Verna (a midsize sedan).

According to the two persons mentioned above, the company had to cut down the production target for FY18 by about 5,000-6,000 units as City and WR-V sales declined.

Honda though has decided on a target of manufacturing around 195,000 cars this year more than that decided in 2017-18, on the back of the new Amaze, a compact hatchback, scheduled to hit the market in the next two-three months.

The company did not want to comment on the production targets for the next year.

“I think Jazz was never very successful in India but the company is focusing on WR-V because compact SUVs are doing well here. Honda products still continue to be of superior quality, but they may not have positioned their vehicles well—probably where other competitors may have scored over them," said Sridhar V., partner, Grant Thornton.

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