Media sources have reported that Honda may be preparing to roll out a CNG variant of its City sedan in the festival season to take on rivals, who have marched ahead due to the presence of a diesel model.

After a setback due to rapid dieselisation of car market, Honda feels that a CNG variant will give it a competitive product to take on diesel rivals like Hyundai Verna and Volkswagen Vento.

A source said Honda had been working on the CNG variant for some time and will make a few changes against a conventional petrol-only variant. "The suspension of the car has been strengthened as the CNG tank will be housed in the boot of the car. Also, a few changes have been made to the engine of the car in line with the requirements of a CNG car," the sources said.

The instrument cluster on the City could also see some changes to reflect CNG requirements. The car is expected to be out by October.

Speaking about the CNG variant, sources told reporters that Honda has decided to do fitment of the CNG kit and cylinder at the dealer-end and not at its factory. The factory will produce a special 'CNG variant' of the City. The price of the CNG variant is expected to be at least Rs. 50,000 (US$ 902)-60,000 more than the City's price.

The ex-showroom price of the Honda City in Delhi starts from Rs. 725,000.

The only handicap to the company's plans is the limited availability of CNG in the country. So, Honda's fight back will be limited. But company is not worried as it is in the process of developing a small diesel engine and this should be ready for production over the next one year. When contacted, a company spokesperson refused to comment.