The launch of Honda’s second eco-car model in Thailand – the Brio Amaze – could not have come at a better time. Introduced a week prior to the start of the annual Thailand International Motor Expo on November 23, Honda created the necessary market buzz to urge buyers looking for their first car to go shopping for the Brio Amaze at the Motor Expo.
Powered by a 1.2-litre petrol motor in Thailand and achieving a fuel efficiency of 20kpl, the Brio Amaze also qualifies for the government’s First Car Buyer Rebate scheme that is scheduled to expire on December 31.
Brio Amaze buyers are thus eligible for a tax deductible of THB 65,000-73,000 (or about $ 2,000/Rs 1.09 lakh) as long as they book a vehicle this year and complete the necessary paperwork, even if the vehicle is not delivered before the end of 2012.
Complemented by a competitive price of $15,000-17,000 (Rs 8.18-9.27 lakh) and an attractive sales campaign until the end of the year, Honda’s Brio Amaze is likely to be a hot seller at the Motor Expo, which helps bolster year-end sales in Thailand.
By the company’s own admission, Honda strove hard to bring the Brio Amaze to market before the year end to avail benefits of the First Car Buyer Rebate scheme. This was an important decision for Honda since the Brio Amaze will be yet another weapon to win lost sales in 2011 on account of first, the Japan tsunami crisis and then the Thailand floods.
In fact, the two crises were a bane for Honda; the Great East Japan earthquake and tsunami struck a week before Honda launched its first eco-car, the Brio to market. The lack of supply meant Honda lost momentum at launch. Not long after, the Thailand floods inundated Honda’s Ayutthaya plant, stopping all production which did not begin until April of this year.
Now armed with a second eco-car model, its 10th model/variant launch in Thailand this year, Honda is aiming to amaze buyers.
We forecast annual sales of the Brio Amaze saloon at 20,000-30,000 units. Together with the Brio hatchback, volumes of Honda’s two eco-cars are projected at 40,000-70,000 units between 2013 and 2019. Given the increasing preference for smaller cars, there is an upside risk to this outlook.
We also believe that the Brio Amaze will marginally eat into the sales of the City although the latter comes with a 1.5-litre engine.
Apart from Thailand, we also believe the Brio Amaze could do well in Indonesia, although there is no indication yet if the four-door saloon is planned for that market. For the Brio Amaze to be successful in Indonesia, it would have to participate in the government’s upcoming Low Cost Green Car (LCGC) programme. This also means that Honda’s engineers would need to slightly improve the car's fuel efficiency to over 20kpl, and the model would have to be assembled locally.
Outside of ASEAN, the Brio Amaze is slated for launch in India by the middle of 2013. The sub-compact saloon will be offered with a 1.2-litre petrol and, more importantly, with a 1.5-litre diesel.
The diesel Brio Amaze will be one of Honda’s most important models for India – a market that is skewed towards diesel because of a wide gap (up to 40 percent) between the price of diesel and petrol fuel.
We think that the Brio Amaze will cannibalise the City in India as well, especially with the diesel Brio Amaze becoming the preferred choice over the City’s all-petrol line-up.
The success of the Brio Amaze will be one of the critical drivers for Honda to maintain its share in this region.
AMMAR MASTER