How did the Honda City go from a simple family car to firing shots at the Camry?

BANG NA, Thailand - Aug. 21, 2020 - PRLog -- In anticipation of Honda Malaysia launching the 2020 Honda City, let's take a quick look back at Honda's popular sedan and a gateway for many Honda fanboys. It is turning 25 soon, after all.

"But the City isn't 25. There was a smaller JDM car made much earlier in 1981, so it should be 40."
Well, I hear you loud and clear but I'm just focusing on the City that moved most of South East Asia and not the little turbocharged bulldog. With that cleared up, let's begin.
The beginning
The original City was meant for the Japanese, European, and Australasian markets in the 1980s but after a little more than a decade of mediocrity, the City name was shelved in 1994 before Honda decided to focus on the next rising market – South East Asia.

Honda did some research prior to the development of the City. These are some of the criteria the team came up with:
  Body size – Compact but with a minimum wheelbase of 2,500 mm in length and 1,690 mm in width for ample interior space.
  Performance – Engine should deliver an output equivalent to 96 PS while maintaining good fuel economy.
  Comfort – The car should be spacious, has excellent ergonomics, and good ride characteristics.
  Safety – Equipped with state-of-the-art active and passive safety systems.
Price – Good value-for-money but equipped with modern styling and tech.
The result was the SX8 City which first made its debut in Thailand in 1996. The City was built on a platform based on the EF Civic at a brand-new factory in Ayutthaya, Thailand using 70 percent local parts to keep costs low.
The reborn City became a huge success in Thailand and not long after, it was sold across ASEAN in countries like Malaysia, Indonesia, and the Philippines. It was the first Honda model to be launched in India where it achieved cult classic status.

Fun fact: There was a Type Z variant of the SX8 but unlike the Type R it wasn't performance-oriented. Instead, the Type Z was used to label the facelifted SX8 which also introduced a 1.5-litre VTEC engine to the model.
information source：https://www.autofun.co.th/cars/honda/city