The production halt of these two saloons is mainly due to poor demand. And in Honda’s case, with the axing of the Civic earlier in 2013, it marks a clear shift in strategy to focus on the lower segments where the volumes are a lot higher.
The Accord’s sales figures for the past six months have been nothing to write home about, with a paltry 215 units dispatched overall in the June-November, 2013 period. The Passat’s sales numbers are equally dismal, with 235 units sold in the same period. In comparison, the Superb from Skoda managed to rack up more sales than both cars combined, at 507 units in the same period.
The poor sales, along with decreasing margins and changing buyer preference towards more affordable, entry-level offerings from premium brands are to blame. The falling rupee too played a part by increasing the cost of production as some of the components are imported.
Moreover, the high pricing of the two saloons brought their price tags very close to those of luxury offerings from the big three (Audi, BMW and Mercedes-Benz). The German luxury car brands also started offering attractive finance schemes with low down payments to outsell each other.
While the Accord (sold with a 2.4-litre petrol engine) was priced at around Rs. 24 lakh, the Passat (sold with only a 2.0-litre diesel motor) was available from Rs. 26-32 lakh from its base Trendline to the top Highline. For around Rs. 35 lakh, buyers could opt for the Audi A4, BMW 3-series or the Mercedes C-class. Even a BMW X1 or Audi Q3 will cost the same.
Both the manufacturers have no stocks left of the saloons and the dealer inventory has been cleared out too. Honda has no plans of launching the next-gen Accord in India until 2015 at the earliest, so its flagship saloon is off the map for now. The new Passat is similarly slated for an international launch in 2015.