Honda stalls City production to accommodate Mobilio

Honda Cars India has halted the production of the City sedan to accommodate the recently launched Mobilio MPV.

The City and the Mobilio are manufactured at Honda's plant at Greater Noida. The Mobilio is a new product and the company is trying to establish its presence in the market. But the limited production capacity of its plant could hamper its ability to manufacture enough units to meet demand. By stopping production of the City, the factory can concentrate on manufacturing more units of the MPV, which will reduce the chance of building up a waiting period for delivery of the car. The Mobilio is also priced considerably higher than its main rival, the Maruti Suzuki Ertiga. In such a situation, it is important that the company keeps the delivery period of car at the lowest.

The City has been Honda's best-selling car in India since it was launched, earlier this year. With monthly sales of more than 7,000 units, it also went on to dominate its segment, dethroning the Hyundai Verna from the top spot. Being an established product, Honda probably feels that the City will continue to attract customers even if there is a delay in delivery.

The production of the City is not likely to resume before late September, 2014. So those who have booked a Honda City in July are unlikely to get delivery before late November.