Underperforming Accord phased out by Honda India

Honda is phasing out its flagship Accord sedan from India following weak demand and dwindling sales, a top company executive told ET. The company will instead focus on the higher volume smaller models, as it wants to be a stronger player across the wider Indian market.

"We have stopped production of the current eighth-generation of Accord in India," said Jnaneshwar Sen, senior vicepresident for marketing and sales at Honda Cars India. "It is our flagship brand and we would be looking at the next generation of the sedan for Indian customers, though the exact launch details have not been worked out yet."

The Accord’s sales had been dwindling in the absence of a diesel option. Adding to its woes were customer preference for luxury German brands such as BMW, Audi and Mercedes Benz since they are available at similar price points in the country.

Honda Cars India sold just 272 Accords in the first eight months of the current fiscal. The company sold a total of 11,492 units of the eighth-generation Accord since the car was introduced in the summer of 2008.

Honda is now looking to focus more on hatchbacks like Brio and the compact sedan, Amaze, moving slightly away from it premium sedans. It had phased out the once-popular Civic from the Indian market last year on weakening demand. Civic, once the segment leader, lost out to rivals Hyundai Elantra, Toyota Corolla Altis and Chevrolet Cruze, which offer the diesel engine option.

The company, however, would maintain focus on the premium SUV market, where its sells CR-V in the price range of Rs 20.59 lakh to Rs 24.67 lakh. CR-V sales increased four-fold in the first eight months of the fiscal, albeit on a smaller base of 186 units sold last year.

Experts say Honda's Indian subsidiary is performing well in the country since it introduced diesel engine in Amaze in April. The company has sold 52,000 Amaze in India so far. Sales at Honda jumped 70% to 80,163 cars in the first eight months of the current fiscal.

The company, however, has not been able to push its bigger cars in the market in the past few years, as competition has intensified in the Rs 20-lakh price band with the debut of a dozen models like Mercedes A&B Class, BMW 1Series and Volvo V40 Cross Country.

Analysts tracking the sector say volume carmakers like Honda and Toyota are already facing heat from luxury segment players. "Currently, all the luxury carmakers are betting big on the smaller car segment to bump up their sales and it is creating lot of heat in the D segment," an analyst said, requesting not to be named as he advises Honda on its strategy in India. "BMW and Mercedes Benz and other brands are downsizing into compact models that has dried demand for other bigger sedans from Honda, Toyota or Maruti Suzuki."