The increase in excise duty in the budget has affected all car manufacturers, but some have been affected more than others. The Honda City is one of the cars that is the worst hit: the price was raised by Rs 10,500 when the new budget was announced, and Honda Siel Cars India has announced that another hike has been tacked onto the previous one that is mere weeks old.
The new hike raises the price of the sedan by another Rs 5000-10500, depending on the variant. The reason quoted for this second hike was the inability of the company to absorb some of the duty hike like it thought it would previously. Considering the Japanese tsunami and Thailand floods last year, it is an understandable situation for the company.
We aren't so sure that customers will be as brand-loyal in a market like India despite the brand strength that the big H enjoys - we're still waiting for that diesel option, Honda. It's the one ray of hope for you to climb back to the top of the sales charts while earning profits.