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In order to gain back their customers, Honda India has cut down the price of its new version of Jazz to 1.62 lakh. This hatchback will now have starting price range of Rs 5.50 lakh, competing with Hyundai’s i20, Volkswagen Polo, Nissan’s Micra, Fiat’s Punto, Skoda’s Fabia, Maruti Suzuki’s Swift and Toyota’s Liva.

Seki Inaba, Director (marketing), Honda Siel Cars India said, “The new Jazz, with an attractive pricing, will surely appeal to customers. With better sourcing and economies of scale for Jazz from higher production, we would be able to garner larger chunk of sales in the premium hatchback segment.”

The new Jazz is powered by the same 1.2 liter i-VTEC petrol engine with an average of 16.7 km per liter. It is also improved in terms of its looks by its aerodynamic design on the front grill in addition to beige interiors and a USB port in the music system.

Monthly sales of Jazz dropped to almost 50% since few months to about 250, despite the fact that the customers were offered freebies and cash incentives. The car launched in India in June 2009 by Honda Siel Cars India had sold more than 13,000 units with the price of 7 lakh. Trade analysts predict that the price slash can re-create the magic for Honda.

Deepesh  Rathore, HIS Automotive India’s Managing Director said, “Jazz’s sales could off-take now and the car could reach an average of 3,000 units per month if Honda can manage to supply it. Though other manufacturers would be forced to increase discounts which may lead to a virtual price war.” He further added, “Customers could look forward to some of the best prices this decade.”

The cost of the car has also been revised as to accommodate Honda’s new compact car model ‘Brio’, which is tentative to have a price of Rs ???% lakh.

The new segment of hatchback is growing rapidly in the Indian auto industry with a sale of 3.5 lakh in the current financial year.

This new development of price cut has been just announced after the launch of another revised version of Maruti Suzuki’s Swift, India’s largest carmaker with a starting price of Rs 4.22 lakh.

The downfall in sales enforced Honda to take some tough decisions. The car has also reduced the price of its flagship ‘City’ by Rs 66,000 since few months. It happened immediately after Volkswagen’s Vento, Hyundai’s Verna, Maruti’s Swift pushed the high-seller to the fourth position. Its cumulative sales dipped 26% to 12,526 cars in the months of April- July period.