By IANS,
Kolkata : The liquidity crunch and exchange rate fluctuations are creating pressure on margins and demand for premium cars in India, a top official of Honda Siel Cars India Ltd said here Wednesday.
According to the data released by the Society of Indian Automobile Manufacturers, sale of Honda Siel cars dropped 19 percent in the April-September period.
“Early reports of sales in October are encouraging that marks the beginning of the festive season,” Jnaneswar Sen, Honda Siel vice-president (marketing) told reporters on the sidelines of the launch of the company’s new City model.
In 2007-08, the company sold 62,800 cars consisting of models like City, Accord and Civic.
Honda Siel is planning tie-ups with public sector banks as several private sector banks and non-banking finance companies are already present in auto-finance business.
“While we have had relationships with several private sector banks for financing, some of our dealers have now started working with state-owned banks like State Bank of India and Punjab National Bank,” Sen said.
The fluctuation in the value of rupee and specifically its depreciation against Yen have forced the company to look at more local manufacturing of components.
Sales of passenger cars of Honda Siel have dropped about 45 percent in September, following the phase out of its City EX model.
“The drop in sales of our cars last month was mostly because of our decision to stop sales of the City EX model. The drop is not an aberration,” Sen said.
The model has now been replaced by the new City model called the ‘Third Generation’, launched in September, he said.