Honda jumps into LCGC market with Brio Satya

JAKARTA. PT Honda Prospect Motor is tapping into the low-cost green car (LCGC) market with the launch of the Brio Satya – a city car with a 1,200 cubic centimeter (cc) engine – on Wednesday.

Awaiting documents from the Industry Ministry permitting it to sell LCGCs, Honda planned to start production of the Satya in October and expected to begin delivery in November, said the company’s marketing and after-sales service director Jonfis Fandy after the launch.

“We have passed the test [the requirements for LCGC], we just need to wait for the documents,” said Jonfis. There is no pre-order list for the Satya, as Honda will begin selling it on Wednesday.

Satya, which means honest in Sanskrit, is a type of Brio, Honda’s city car that was launched last year. Along with the Satya, the second generation Brio and Brio Sport were also launched. Honda has targeted to produce 4,000 Brio every month, 30 percent of which would comprise Satya’s.

By joining the LCGC market, Jonfis expected sales of Brio to rise by 50 percent. The Brio currently has a city car market share of around a 28 percent, according to Jonfis. From the launch of the Brio in August last year to the end of 2012, Honda sold 8,002 Brio’s.

Earlier on Monday, PT Astra Daihatsu Motor and PT Toyota Astra Motor launched their LCGCs, the Daihatsu Ayla and Toyota Agya, both with a 1,000-cc engine capacity.

Unlike other LCGCs, Honda chose to equip its Satya with a 1,200- cc engine, the maximum engine capacity for LCGCs, according to the 2013 Industry Ministerial regulation on the development of the
LCGC project.

“Our country is an archipelago, there are lots of highlands. Most of our people also put lots of stuff inside their cars, therefore power is needed,” Jonfis said. Honda was also committed to equipping all of its cars with high performance engines, he added.

The Industry Ministerial regulation limits engine size for LCGC’s to between 980 cc up and 1,200 cc for fuel, while the cars should not be priced above Rp 95 million. Prices, however, can increase by up to 10 percent for safety technology and 15 percent for an automatic transmission.

With dual airbags, the Satya is priced between Rp 106 million up and Rp 117 million, making it the cheapest Honda. All three Satya types come with a manual transmission.

“Many people will buy [Satya] as their first car and most of them will opt for a manual transmission,” Jonfis said.

The Satya’s starting price is the highest among LCGCs recently launched, including the Daihatsu Ayla and Toyota Agya, which start at Rp 76 million and Rp 99 million, respectively.

Even so, Honda was still confident that it could compete in the LCGC market as the Satya was outfitted with good features and the latest basic technology, said Jonfis.

“Most of first time buyers keep their cars for five to six years. So we want to make sure that their cars are good till then,” he added.

In accordance with the regulation, the Satya uses an Indonesian name and is made with 85 percent local components, including the engine.

Commenting on the possibility of consumers shifting from the Honda Jazz, the company’s popular hatchback car, Jonfis said that both segments had their own markets, adding that the Jazz market was “more mature,” while the Brio’s market was young users.

The Jazz has almost a 50 percent hatchback market share, said Jonfis. In the first half of 2013, around 16,056 Jazz were sold.