The Honda City Success Story: Setting the New World Standard for Compact, Four-Door, Family Sedans

March 31, 1997, Thailand


Bangkok, March 31, 1997 - The Asia-Pacific region's successful economic development over the last two decades has resulted in a rapid increase in per capita incomes in many countries and the emergence of a growing middle class.
These conditions in turn have created a favorable environment for the development of indigenous automobile industries in many countries with mass motorization usually regarded as taking off when per capita incomes reach Baht 100,000 (US$4,000) per year.

Monitoring these developments carefully, Honda Motor Co., Ltd., one of the world's largest manufacturers of engine-powered products, identified a major market opportunity which was not being adequately served by any international automobile manufacturer.

The market opportunity in question was the rapidly growing number of first time automobile owners, who, our extensive market research indicated, were not being well served by the existing range of entry-level models.

Honda's research, carried out in a number of countries throughout the region, identified the following characteristics as being the most important to achieve customer satisfaction in this strategic market segment :

Body size : The desired vehicle should be compact in size but with a minimum wheelbase of 2,500 mm in length and 1690 mm in width to provide ample interior space for a family and excellent driving stability.

Performance : The engine should produce acceleration performance equivalent to 95 bhp with good fuel economy.

Comfort : The vehicle should possess excellent ergonomics, providing a spacious passenger cabin, good ride characteristics and a high level of standard equipment.

Safety : Both active and passive safety systems should be state-of-the-art.

Price : While price was very important, potential customers indicated that excellent "value-for-money" was even more important. They recognized that anybody could build a cheap car, simply by utilizing old technology and providing minimum equipment levels. But this was not what they wanted. They wanted a vehicle that offered modern styling and technology, a vehicle that offered "pride in ownership".

It was with these customer-driven requirements in mind that Honda set out to create "the new world standard, compact, four-door, family sedan."

At the early stages of development Honda's engineers expected to use an existing model's platform on which to build this new model. Such an approach would have minimized development costs.

However, this idea was quickly abandoned as it became clear that the only efficient way to meet this new customer segment's expectations was to design an entirely new model from the ground up.

Thus the City was born.

In April, 1996 the world launch of the Honda City took place in Bangkok. These first City sedans were manufactured at Honda's new Baht 4,000 million auto manufacturing facility in Ayutthaya. Working closely with local parts suppliers Honda's engineers achieved an unprecedented 70 per cent local content which contributed to the City's competitive pricing.

With the City, Honda's engineers and product development team achieved, in fact, exceeded the performance targets established by the earlier market research.

In terms of performance, safety, comfort, body size and "best value-for-money" the City excelled.

Customer reaction was exceptional. Through February 1997 14,353 units have been sold in Thailand and the City achieved a dominant 66 per cent market share in the under Baht 450,000 price segment in 1996.

In addition to its success in Thailand, the City has also taken other Asian auto markets by storm. It has been launched with local production in Indonesia, Taiwan, the Philippines, Malaysia, and, most recently, in January 1997, in Pakistan, supported by Honda's regional parts complementation programme.

Total City units sold and delivered across Asia up until the end of February 1997 amount to 25,614, helping Honda to achieve record sales in Thailand, Malaysia, the Philippines and Taiwan.

And now comes the City 1500 with more power and enhanced safety and comfort features, offering even greater "value-for-money".

With the City, Honda has established a new world standard for compact, four-door, family sedans. With the City 1500 Honda aims to confirm the City's status as the car by which all others in its class are judged.

"Best-in-class" performance, "best-in-class" comfort and "best-in-class" safety. The Honda City 1500 delivers.