Wow... Relax guys.
Honda is selling enough cars for anyone to even think that the might exit the market. Honda Atlas knows that Corolla is a better selling car and they also know that new Corolla model is a stunning car. Currently, City is 1 lack cheaper than entry level Corolla.
New City is pretty ordinary on the exterior but good in the interior. Unfortunately, the models launched here are stripped down versions and with cheap plastic which will ruin the interior too. So competing with Corolla will be hard and price will go up too. So they are probably waiting for Corolla fever to die down so at least the can capitalize on their new model and increase sales in the early period.
BTW, since we're are speculating, what are the chances and options that Atlas are going to kill the City and launch a better/more comfortable car to compete with Corolla? Maybe something in sedan and hatchback with commonality for economies of scale and ease of spares?