Maruti Suzuki India forced to offer big discounts on its own seven-seater Ertiga because of the aggressive pricing of Honda's newly launched Mobilio multi-purpose vehicle.
The Mobilio, Honda's first MPV offering in the country, starts at Rs. 6.49 lakh (ex-showroom price for the base grade petrol version), whereas, Ertiga's petrol variant starts at Rs. 5.80 lakh. At the same time, sources say India's biggest car maker is offering up to Rs. 85,000 discount on the model to neutralise the Mobilio's likely onslaught.
Dealers of Maruti are giving Rs. 25,000 to Rs. 30,000 cash discount and up to Rs. 50,000 in exchange bonus for Ertiga customers. In India Ertiga was launched in April 2012.
Mobilio gives Honda a chance to compete in the MUV segment, which accounts for roughly 15 per cent of car sales per month. Honda's other big competitor in the MUV segment will be Toyota's Innova, which sold around 5,400 units in the month of June 2014.
Auto analyst at Prabhudas Lilladher, Surjit Arora said that Honda Mobilio is a very good product and could sell 2,000-4,000 units per month.
He added, "Honda Mobilio, in terms of looks and performance, is a better product, but in terms of value for money, Ertiga stands out."
He also said that the Mobilio is unlikely to cause too much of a trouble for Maruti's overall sales, Mr Arora added. Ertiga is hardly 6-7 per cent of Maruti's overall volumes, so I don't see a meaningful negative impact on Maruti because of Mobilio.
Even the stakes are high, Honda has emerged as a force to reckon with in the Indian automotive scene since the launch of its compact sedan Amaze last year. The Amaze has sold over 90,000 units and has emerged as the biggest competitor of Maruti Dzire, which continues to be the segment leader.
Yoshiyuki Matsumoto, the managing officer said on Wednesday that Honda Cars India will account for 25 per cent of the Japanese carmaker's Asia Pacific sales target of 1.2 million units by March 2017.
President and chief executive officer of Honda Cars India, Hironori Kanayama said, "Honda plans to raise the number of dealers in India to 230 by March 2015 from 179 now".