Is it possible that Honda launches 6th and 7th gen both?
7th gen is larger and will be more expensive than Yaris which would leave Yaris without competition in its price segment. 6th gen will be cheaper and will be able to compete with Yaris in term of pricing as well. Honda won't want to leave the cheapest sedan segment all to Toyota so it makes sense for them to launch the cheaper of the two vehicles.
In India Honda hasn't discontinued 6th gen City and will be selling it alongside 7th gen so that they have a product that can compete in lower priced segment. Honda Atlas can devise similar approach and position 6th gen against Yaris, 7th gen against Altis 1.6 while Civic will continue to compete with Grande.
Maybe rumors about launch of both versions are correct 