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Honda planning a new small car to compete with Maruti Alto, Hyundai Eon

Snapshot: Encouraged by the success of Honda Amaze, Honda Cars India is planning to introduce a new small car as well to compete against the likes of Maruti Suzuki Alto, Hyundai Eon and others in mini car segment, says a report published in Financial Express. The company that has been facing a production constrain at the moment has also started doing feasibility study for setting up its third plant in India at Sanand, Gujrat, while the Tapukara, Rajasthan based facility will come into operation by early 2014. This third plant will basically cater to a new entry level small car, which is likely to be priced around Rs 3-4 lakh.

Encouraged by the success of Honda Amaze, Honda Cars India is planning to introduce a new small car as well to compete against the likes of Maruti Suzuki Alto, Hyundai Eon and others in mini car segment, says a report published in Financial Express. The company that has been facing a production constrain at the moment has also started doing feasibility study for setting up its third plant in India at Sanand, Gujrat, while the Tapukara, Rajasthan based facility will come into operation by early 2014. This third plant will basically cater to a new entry level small car, which is likely to be priced around Rs 3-4 lakh.

The report further says that these plans were discussed at a meeting in New Delhi last month, where Honda's global chairman Fumihiko Ike and global president Takanobu were also present. Expected to be positioned below Honda Brio, this new small car will be the most affordable Honda car ever. But the car might not launch anytime before 2016, as the company hasn't yet finalized anything. Also, the company has to bring in the next-generation Honda Jazz, new Honda City, Mobilio (a Brio based MPV) and a compact SUV to India within the next couple of years.

"We have to run fast to get volumes in India because we are very small today. Honda feels that to maintain and grow its global market share by 2020, increased capacity will be needed in emerging markets like India, from where the growth will actually come, since developed markets are near saturation. Talks are on for various products, but nothing has been frozen. But only when we are sure of utilising the new capacity at Tapukara, can we ask the headquarters for more investment." a Honda Car India official said.

When Honda cars India was contacted, it clearly denied commenting on any such plans as of now. It said that the company's focus currently is to meet the deadline for the Tapukara plant and begin car assembly operations there by next year.

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