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Old 31st October 2011, 20:01   #16
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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Originally Posted by scopriobharath View Post
Some vehicles that i could think of

Honda CRV
Hey the CRV was a very successful car at the time of its launch and enjoyed decent numbers for quite some time before the Petrol prices started hurting it and also the price of Yen forcing honda to price it insanely. Yea right now its a dud and I am sure with a new model Honda will price it more aggressively.

Mitsubishi is a mystery. A company which came and tasted success with Lancer. A company which most people will still be looking forward to and still has a good fan following. But they are just not bothered. I don't think they feel that the Indian market is for them. Otherwise I don't see any reason why they don't want to clean up the mess they have made out of the whole deal and start fresh.
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Old 31st October 2011, 20:18   #17
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

My heart goes for the TATA ARIA . . . Tata surely scored a golden selfgoal with this one. Tata should reduce the price by about 10% - 15 % and see the sales go through the roof.

For the rest, they have got what they deserved.
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Old 31st October 2011, 20:22   #18
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

Nice read. You spoke my mind GTO. Cant figure out what the people in the board rooms were smoking when they approved of these pricing strategies. What is more puzzling is that Skoda who actually invented a new segment with Octavia has now messed up totally with the Yeti. And I am not don't even want to start about CRV and Kizashi. So sad to see such awesome machines become such huge failures.
Anyways we enthusiasts will have something to cheer about when these reach the pre-worshipped market 1 or 2 years down the lane with mouthwatering price tags

PS: Judging by the way Kizashi sales are going, its hugely unlikely that they will provide be of any sort of contribution to the pre-owned market
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Old 31st October 2011, 20:52   #19
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

I think the aria, like the xenon is just a halo vehicle for tata. I dont think they are really interested in selling it. They just want to make their other cars seem reasonably priced, and at the same time, try to push their brand positioning a little big higher.
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Old 31st October 2011, 21:25   #20
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

This is one of the best thread ever started and thanks for it GTO.
Sometimes even very well priced cars are not doing well and the car is Fiat Linea.
I bought Linea Petrol 1.4 E pack at price of 7.28 Lacs on road in Gurgoan in 2009 March, though I am enjoying at the fullest but sales at present tells other story.
So can't understand market very well at the momnet.
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Old 31st October 2011, 21:36   #21
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

Very interesting article GTO. Sad to see that ARIA has such low volumes, and as said XUV makes,ARIA's price look outrageous. So is there no saving ARIA ? Is it destined to loose out to XUV ?
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Old 31st October 2011, 21:49   #22
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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My question is simple : How did the respective auto brands, with all the money, talent & research in the world, think they'd get away with it?
The triumph of optimism over experience?

There was an interesting speech by Rajiv Bajaj the other day which might throw some light on this.

Regards
Sutripta
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Old 31st October 2011, 21:50   #23
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Very nice thread and completely agree with the first post. I'm sure if this thread had featured 6 months later there would have been one more addition to the list. The Koleos!!

Renault simply does not have my confidence at this point. Its one thing to have a nascent dealer network - but it's first 2 launches undermines my confidence even more merely because I feel that they don't really quite 'get' my market and therefore why should I put my money on the brand.

Skoda too at original launch (Octavia) was an excellent value proposition. Over the years, that has led it to slowly inflate the Octi / Laura price tag including an expensive Fabia. If you think about it, it's most successful model (only successful model) in recent times is the Superb (in terms of sales relative to segment standards) - no prizes for guessing why - VFM!! Shocking then that they should follow such a spot on product positioning coup with a dud like the Yeti.
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Old 31st October 2011, 22:29   #24
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

Very good thread GTO. Among all these vehicles, the biggest disappointment for me was TATA ARIA, a brilliant product in all aspects killed only by the over ambitious pricing by some fools. Aria is the best product from tata and shows how their engineering has come a long away. Only if it would have been priced in 10-12 lakh range covering all models, it would ve been a superhit.

Some other cars i would like to add are, renault koleos and skoda fabia
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Old 31st October 2011, 22:51   #25
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

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Originally Posted by GTO View Post
My question is simple : How did the respective auto brands, with all the money, talent & research in the world, think they'd get away with it? What kind of research have they been really conducting? Did common sense ever figure in the brainstorming sessions?
Taking bit contra stand compared to overall argument -
price point compared to competition is not the only way to price a product. Probably, these companies are using cost+ reasonable margin formula to come up with the pricing. We will however never know their real costs or margins. So cars that are comparatively lower priced may be at discount to the margin or they are cost masters (like Walmarts of retail world).

However, Jazz and City price cut shows that there was enough cushion for such price cuts. Now what we don't know if Honda has cut down on their margin or should we believe their story of increasing local production has lowered the cost?
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Old 31st October 2011, 23:12   #26
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This is indeed a nice read GTO.
Might sound naive For asking but do we know the production cost for say the new Ford Fiesta ? As in what Ford is spending per car or for that matter any of these failed car makers ! Are they really this greedy or is there a simple markup for profits over the total cost to the maker?

Also noted someone saying cars are really overpriced in India, while I more or less tend to agree, India is still way cheaper than a lot of other countries. In Brazil for example the cheapest variant of the Logan is going at an equivalent of over 8 lakhs !
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Old 1st November 2011, 00:05   #27
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

Wonderful insight. something i have been thinking to post for a long time. But you know i am not good with words.

Does CRV and Outlander fall in this list.
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Old 1st November 2011, 00:08   #28
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

Superb thread. Very well compiled and written.

The sad thing is that the companies still don't learn. Case in point being the new Ford Fiesta, and the pricing of the Hyundai Eon's top variant, which is seriously encroaching into the range of hatches 2 segments above it!

I am fairly sure we will have another example in the upcoming Renault Pulse as well. And now with the XUV 500's superb pricing, even the upcoming Safari facelift will have a real tough nut to crack as well.

And the way to go from there? Stripped-down variants at cheaper prices, which is like an insult to the automobile lover's intelligence. Skoda Fabia, anyone?

Time to do some serious introspection and analysis, car companies!
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Old 1st November 2011, 00:24   #29
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

When Fusion was launched, I was working on a project for Ford and I immediately mailed my colleagues in Ford that it was doomed with the price it was launched with - I was correct. With Figo, I thought Ford at last learned it's lesson. Alas, it was not to be. New Fiesta is a pricing disaster. I predict that it will go the way of the Fusion unless something drastic is done.
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Old 1st November 2011, 00:52   #30
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Default Re: Big Money + Big Talent = The overpriced market dud. How?

IMO the Jazz pricing was the most insulting one. If you have a cushion of 1.5L then as someone pointed out earlier- its plain cheating. In my view Honda should be shunned for this as no one buys the claptrap of "localization" benefits. And even if that were true, Honda is not large hearted enough to pass it on.

@radek: Pricing can never be based on one or two parameters alone,, especially for a complicated product like a car. The emotional quotient weighs pretty high and so I am assuming that its driven by lot of value adding factors and where these companies have faltered perhaps is in quantifying these factors. They have overestimated the worth of some of the factors (for example : brand benefits by Honda and feature benefits by TATA)
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