Accord resale prices to crash as Honda may discontinue car
Honda is planning to discontinue the Accord luxury sedan in India. This comes just a few weeks after news surfaced that Honda is planning to stop selling the Civic in India. Both these cars sales have been floundering due to the lack of a diesel engine.
According to a report in the Japanese business daily, Nikkei, Honda is planning to scale down its line-up of sedans in the Indian market and focus mainly on the small and compact car segment. It’s easy to see why Honda is taking such a step. Sales of the Accord and the Civic have steadily declined in the past few months.
Honda sold only 481 Accords between January and August this year, with only 34 units being sold in August. Compare this with the January to August 2011 period, where the company sold 1,149 units of the Honda Accord in those eight months, and you’ll see how badly this car has been affected by the steep hike in petrol prices. Demand has clearly shifted toward diesel cars even in the Rs. 20 lakh to Rs. 25 lakh price bracket. Also read:New Honda Accord debuts in the US
The sales leader among sedans in the Rs. 20 lakh to Rs. 25 lakh price bracket is the Skoda Superb, selling 1,485 units between January and August this year, down from 2,500 odd units in the same period last year. That’s still nearly three times more than what the Accord sells – purely because the Skoda Superb comes in petrol and diesel engine choices.
It’s a similar story with the Honda Civic as well, which was once one of the top-selling cars in its segment (the Rs. 12 lakh to Rs. 18 lakh price segment). The lack of a diesel engine has meant that buyers have been increasingly shifting to other brands that have diesel engine choices. Sales of the Civic were down to a mere 53 units in August, compared to 330 units that it sold in August 2011! Between January and August 2011, 2,580 Civics were sold, but in the same period this year only 850 Civics have been sold. Also read:Honda to discontinue Civic in India
One must note that petrol prices were deregulated in June 2010 and ever since the gap between petrol and diesel prices has risen considerably, where a litre of petrol is now nearly 70% more expensive than a litre of diesel. This price gap has suddenly accelerated the demand for diesel cars across segments and Honda, a petrol-only carmaker so far, has borne the brunt of it. The company is now experimenting with a diesel engine and is likely to launch the Honda Brio diesel by mid 2013. The Brio is Honda’s largest selling car at the moment. The diesel engine will then find its way to the Jazz and City as well.
If you are a fan of the Accord and always wanted to own one, this may be a good time to check out the used-car market. Another side effect of Honda planning to discontinue the Accord is that the car’s resale value will drop considerably. Already the Accord has poor resale value with six-year old cars selling for as little as Rs. 6 lakh in the Indian market. This is set to drop further. If you are looking for a used Accord, this is a good time to go shopping. And if you own an Accord, it’s better to swap it as soon as you can while prices still hold up. Also read: Run an Accord as cheap as a hatchback