Mobilio's Launch Forces Maruti to Offer Big Discounts on Ertiga: Report

The aggressive pricing of Honda's newly launched Mobilio multi-purpose vehicle (MPV) has reportedly forced Maruti Suzuki India to offer big discounts on its own seven-seater Ertiga.

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). Ertiga's petrol variant starts at Rs 5.80 lakh, but 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.

(Also read: Honda Mobilio MPV Launched; Priced at Rs. 6.49 Lakh)

Maruti dealers are reportedly giving Rs 25,000 to Rs 30,000 cash discount and up to Rs 50,000 in exchange bonus for Ertiga customers. Sales of Ertiga, which was launched in April 2012 in India, have been flat at around 5,000 units over the last few months.

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 June 2014.

Surjit Arora, auto analyst at Prabhudas Lilladher, told NDTV that Honda Mobilio is a very good product and could sell 2,000-4,000 units per month.

"Honda Mobilio, in terms of looks and performance, is a better product, but in terms of value for money, Ertiga stands out," he added.

However, 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, he added.

For Honda, the stakes are high though. 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.

Honda's all-new City, launched earlier this year, has already beaten its rival Hyundai Verna to the top slot in the sedan segment. (Read the full story)

Strong sales of Amaze and City have increased Honda sales in India by 40 per cent to 40,516 units in the April-June quarter from the year-ago period. For the fiscal 2013-14, Honda Cars India reported 83 per cent increase in sales at 1.34 lakh units as against 73,483 units during the previous year.

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, managing officer Yoshiyuki Matsumoto said on Wednesday.

Honda plans to raise the number of dealers in India to 230 by March 2015 from 179 now, said Hironori Kanayama, president and chief executive officer, Honda Cars India.

(With inputs from agencies)