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Old 28th May 2011, 20:28   #76
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Default Re: Honda India : The Way Forward

Funnily according to me the fortunes of Honda are not within its reach. In fact the fortunes of honda in India are mainly with the hands of the Indian government.

Think of the fact, if the diesel prices are deregulated. Then the number of Honda would surely increase. Again I am not saying it will become leader, but the figures will improve atleast by 50%. Honda city numbers will improve. Additionally, buying an Hyundai i20 Diesel might not make sense and you never know Jazz might pick up even. I am just speculating. I am not saying it will sky rocket, but it will surely improve Honda's fortunes
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Old 29th May 2011, 01:55   #77
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Default Re: Honda India : The Way Forward

Excellent Post GTO ....

1. It sounded a LOT like Nokia's story in the past 3-4 years.
(lots of similar lessons to be learnt - complacency, wrong price-point, being the follower than the leader / innovator)

2. I loved the point - Honda DOES not sell outdated cars in India like MOST other MAJOR car makers

3. This whole point about 'features' cannot be emphasized enough !!!

I had this guy at Volkswagen telling me (when I was complaining about lack of features after a TD) : Sir, we sell quality cars with 6yrs. anti-corrosion warranty & 3 yrs. paint warranty. You will never get bored of our cars.
To which I said : With all due respect - any guy who buys a car will more or less not upgrade for atleast the next 4-5 years .... & OBVIOUSLY I will be BORED looking at the plain steering wheel of a Vento when every car today seems to have steering controlled buttons + bluetooth ! - be it i10, i20, figo, manza (VFM cars in their segment)


Lovely post GTO - I just hope Honda is reading this forum as regularly as well are !
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Old 30th May 2011, 08:58   #78
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Default Re: Honda India : The Way Forward

Great post GTO.

To succeed in India, Honda needs needs Diesels like - yesterday. The absolutely, totally failed on that one. It should have been here 2-3 years back when they were at the pinnacle of brand perception, and now it will be an uphill battle.

Opportunity lost! This could be a case study for strategists.
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Old 30th May 2011, 23:28   #79
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Default Re: Honda India : The Way Forward

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Opportunities
  • BRIO! I hope Honda has learned its lessons and will give the Brio a VFM pricetag. The upcoming Brio hatchback has the potential to give Honda India previously unseen volumes. Simply put, the Brio is make it or break it, in terms of the mid-term future for Honda.
  • Jazz : This girl's never going to move at the current pricing, Honda. Swallow a bitter bill, cut the price by 1.0 lakh and watch her fly out of showrooms. No one has a problem with the product; each ownership review speaks highly of the car's quality & capability. Unfortunate that a nearly flawless product is made to fail due to flawed business strategy.
  • Diesels. When Maruti - a onetime strong opponent to diesel cars - can say "If you can't beat 'em, join 'em" and tied up with Fiat for diesels, why can't Honda outsource oil burners? Plus, the Civic & Accord can make use of Honda's own 2.2L CTDi diesel that it sells in the UK.
  • Add better equipment levels to the City, Civic & Accord. Don't make them look sparse in all product comparisons. This is the easiest to manage, and can be accomplished in a quarter.
  • Honda seldom offers discounts, at least officially. Well, pick a leaf from BMW's super aggressive strategy. Offer 0% finance deals for slow movers like the Civic & the Accord.
  • Dual fuel variants. There's no better time to introduce factory-installed, precision-engineered, CNG & LPG variants. Build them and then, market them hard.

Why not the hybrids? Till Honda finally gets the diesel engines here (atleast another 2 yrs), they could gain substantial sales if they start making hybrids here. Theres the civic, the insight and the fit they could readily sell here. Of course, the sales would depend on the pricing (which Honda really needs to evalutate) but if priced right, I feel it would do wonders for them. Remember the Civic hybrids had really poor sales at 20+ Lac pricetag but flew off the shelf when the price was reduced to 14 odd Lacs.
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Old 31st May 2011, 14:43   #80
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Weaknesses
  • NO DIESEL! Petrol is priced stratospherically high today, and even those cars owners with deep pockets feel the pinch on every full tank bill. I reiterate that Honda is the only manufacturer without a diesel engine in its lineup, and that is the biggest disadvantage today. Honda has merely 1 diesel engine worldwide. That's the outcome of being overtly dependent on the USA market, I guess.
Just a thought - 4/5 yrs ago Diesel was Rs 4 less than petrol. Can there be a scenario wherein after a couple of yrs we land in the same pot? Then all these discussions which are biased against petrol-vehicles might become irrelevant.
Heard that IOC is mulling over a price rise of Rs 13 on diesel
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Old 31st May 2011, 14:57   #81
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Interestingly Honda is perceived as arrogant and not listening and while Toyota as good listener and good learner. HOnda had a headstart over the Toyota in terms of entry, brand etc. Their brand was based on best technology is also slowly eroding, and dieselisation and higher petrol prices made things worse.
Honda seems like Hare while Toyota seemed like Humble Tortoise and winning the race.
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Old 31st May 2011, 15:11   #82
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Default Re: Honda India : The Way Forward

@ Rahul Sinha

Inflation fears stops the Govt from drastic Diesel price hikes, I am not justifying it but its unlikely. That said they are more fuel efficient that petrols and also command a higher resale value. The Diesel prices do not have an unfair subsidy in Europe but this has not prevented diesels from overtaking petrol car sales. Do you think the likes of Hyundai or every other car major has a diesel option in their line up becuase diesel is subsidised in India?!! The fact that Honda has decided to develop a second diesel engine (albeit at their own pace) proves a point in itself.
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Old 31st May 2011, 15:52   #83
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Default Re: Honda India : The Way Forward

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Originally Posted by rahul_sinha View Post
Just a thought - 4/5 yrs ago Diesel was Rs 4 less than petrol. Can there be a scenario wherein after a couple of yrs we land in the same pot? Then all these discussions which are biased against petrol-vehicles might become irrelevant.
Heard that IOC is mulling over a price rise of Rs 13 on diesel
They won't become irrelevant, because diesel engines are inherently more fuel efficient than petrol. Check the petrol / diesel FE of any car and you'll see that the diesel is usually 25 - 30% more efficient. Thus, even if petrol & diesel are priced identically, the diesel will still be noticeably cheaper to run.
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Old 31st May 2011, 16:14   #84
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Default Re: Honda India : The Way Forward

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They won't become irrelevant, because diesel engines are inherently more fuel efficient than petrol. Check the petrol / diesel FE of any car and you'll see that the diesel is usually 25 - 30% more efficient. Thus, even if petrol & diesel are priced identically, the diesel will still be noticeably cheaper to run.
Take the case of the UK, where diesel is (marginally) costlier than petrol. Still diesel vehicle sell. In lower numbers since only the high mileage (30,000+ miles per annum) drivers want them.
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Old 31st May 2011, 17:45   #85
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They won't become irrelevant, because diesel engines are inherently more fuel efficient than petrol. Check the petrol / diesel FE of any car and you'll see that the diesel is usually 25 - 30% more efficient. Thus, even if petrol & diesel are priced identically, the diesel will still be noticeably cheaper to run.

Petrol cars are double whammy! Petrol costs more and burns more. Irony is, rich guys are mostly buying diesel while the average-income guys still root for petrols. Imagine the situation where an i10 owner spends nearly 3 times on fuel of a very efficient diesel sedan like Octavia owner for the same amount of running.
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Old 31st May 2011, 20:49   #86
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Default Re: Honda India : The Way Forward

^it is only modern Diesels (post CommonRail Diesel tech) have taken the game up to the petrols. Else northern EU still roots for Ethanol+Petrol as Diesel isn't economically suitable for most Arctic and Tundra climates. Still the running mileage governs if you buy a Diesel or Petrol.

E.g. If I drive 500 km per month then it does not make sense to get a diesel even if the price is equal to petrol as the service turns out to be more expensive than petrol.

I know someone who made a killing as he patented the tech to transport Diesel in polar regions of Canada, as the heavy machines make use of Diesel tech for working around the clock.
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Old 31st May 2011, 21:10   #87
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Default Re: Honda India : The Way Forward

@Sn1p,

How do modern diesels have higher service cost than a petrol, the oil change interval is the same, one doesnt have to replace spark plugs and the engine life is always higher. Other than that every other service parameter other than the engine, wheel bearings, suspension, tyres, consumables are the same ,whether its diesel or petrol.

The only major issue is the initial cost difference primarily due to higher sales margins on diesel models. Then one also has to take into context the higher resale values as well.
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Old 31st May 2011, 22:02   #88
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Funnily according to me the fortunes of Honda are not within its reach. In fact the fortunes of honda in India are mainly with the hands of the Indian government.
Interesting point you made.

But it is a long way off, govt cannot afford to deregulate diesel prices as Indian growth engine will suffer a serious snag if it happens. So they will keep it as it is as long as they can. And in a peculiar way, Honda too will continue to suffer.

Last week I dropped in a Honda showroom casually. Asked them how's sales.
Answer?
"Bahut kharab hai" (very bad).
Why?
"Diesel, sir, everyone wants them now".
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Old 31st May 2011, 22:25   #89
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@Sn1p,

How do modern diesels have higher service cost than a petrol, the oil change interval is the same, one doesnt have to replace spark plugs and the engine life is always higher. Other than that every other service parameter other than the engine, wheel bearings, suspension, tyres, consumables are the same ,whether its diesel or petrol.

The only major issue is the initial cost difference primarily due to higher sales margins on diesel models. Then one also has to take into context the higher resale values as well.
You are right. Modern diesels outlive petrols. Many people still have this misconception about diesels from the good old Amby days when diesels were not reliable. Now things are totally different. My Y2K Lancer D is nearring 2 lakh KMs and it still runs FANTASTIC. Starts, runs and sounds like new, still. And there are some 5 lakh Km completed Lancer Ds just going on running without a single issue to the engine-gearbox.

In fact, contrary to popular belief, I find more problems cropping up in old petrol engines, irrespective of make. Starting problem, misfiring, sputtering, eight-stroking, jerking, hot-engine start problem, early morning cold-engine start problem, post-carwash start problem, start problem if soaked in rain or driven through water-logged road. That is because there too many electricals involved in a petrol car. Induction coil, CDI, spark-plugs etc. On the other hand, diesel being compression-ignition is a lot simpler and once the engine fires up, it will only stop if you turn off ignition or if it runs out of diesel. No sputtering, misfiring etc. The only thing boring about diesels is unexciting exhaust note. But even this has a silver lining. My previous petrol car, Cielo, had such a sexy exhaust note that I used to rev it often even in neutral and change gears at redline ( just to hear that growl ). Result-- already low FE of Cielo was further down. Normal FE of 7-8 kpl came down to 4-5 kpl and even way back in 2004-05, I was spending 10-12 K on petrol every month. Now, since my Lancer D has no sporty growl, I drive very sedately and as a result, I extract even more FE.
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Old 31st May 2011, 23:38   #90
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Default Re: Honda India : The Way Forward

You are spot on GTO in your analysis. Some of you may take pains to check to some of the posts that I put in this forum in last few years saying almost all of it.

They do not have a diesel is not the primary reason of their suffering. According to me, overpriced products is the major reason of their reversals. 5 yrs back when I went to buy Civic, I found it grossly over-priced given that they they launched Civic without Airbags, ABD, ESP and so many other features that should have been provided in that segment. I bought Cedia as it was way more kitted and practical than Civic.

It was a complete shocker to me when they launched Honda City without CD player and alloys. Come on Honda that was literally taking its customers for a ride.

Car buyers are much more aware in India today as compared to 7-8 years back. VFM is something that every buyer is looking for regardless of the segment. Honda cars always have great exteriors but that is the only good thing about them. Time for them to provide more for the same money in all their cars.
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