Japanese car maker Honda on Monday unveiled its latest iteration of City sedan at a launch event in New Delhi, India.

The 2014 City follows Honda's new design philosophy - "EXCITING H DESIGN!!!" and is based on the 2014 Jazz/Fit. For the first time in the Indian auto market, Honda is offering the sedan in both petrol and diesel engine options.

The fourth-generation City sedan will hit the Indian market in January 2014 and will be made available in 55 countries. Honda did not reveal the price details, but reports suggest that the vehicle will carry a price tag ranging between ₹7- ₹10 lakh.

On the mechanical front, the petrol version of the City sedan packs a 1.5-litre i-VTEC engine which churns out a power of 98bhp and 200Nm of torque. The diesel variant has a 1.5-litre i-DTEC engine, which is also used in the Honda Amaze. The 1.5-litre iVTEC motor produces 116bhp and 146Nm of torque. The company claimed that Honda City diesel will be the most fuel-efficient sedan in the diesel segment.

The length of the new City is same as its current City model, but its wheelbase has been increased by 50mm. Also, the leg room and height have been raised by 60mm and 10mm, respectively. The car accommodates a 5-inch LCD display with Bluetooth and rear-parking camera support, steering mounted audio controls, sun roof, touch-screen AC panel, start/stop function, rear AC vents, eight speakers, four charging points, and cruise control. The vehicle will compete with Hyundai Verna, Volkswagen Polo, Ford Fiesta and Skoda Rapid in India.

Honda City has been among India's top favourites ever since its entry in 1998. The company has sold a record 4.3 lakh units since then and hopes the country will contribute 25 percent to global sales.

Quick Links