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Old 27th March 2008, 09:21   #1
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Default Why is the Honda CR-V imported?

I don't understand much market dynamics when it comes to vehicles. Hence, the question?

Honda has been in India for almost 10 years now and we still get Honda CR-V as a CBU . Is it a case of Honda taking the Indian buyer for granted, because inspite of being a CBU, the CR-V sells pretty well compared to its immediate competitors. Or is it a genuine situation where Honda do not have the production capability for the CR-V?

Since, its a CBU it attracts a mammoth 110% as duty. Clearly, if its manufactured in India, the CR-V may cost in the sub 15 lac bracket as against the 19-21 lacs one pays right now. Correct me if I am wrong?

Just wanted to be educated on this front. No Honda bashing intended at all!

Your comments are welcome and appreciated.

Mods, if such a thread exists, please merge or delete this one.

PS: There are many other cars from other manufacturers which follow the CBU route, but I would like to understand only the CR-V aspect. Maybe this thread can be generalised later on to understand other players as well.

Last edited by wanderlustindia : 27th March 2008 at 09:23.
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Old 27th March 2008, 09:36   #2
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simple - volumes vs cost of setting up local facility
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Old 27th March 2008, 11:15   #3
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The crv sales volume is too little for it to be made in India.Predominantly a diesel market for the SUV means they wont be that confident in setting up such huge facility for a petrol SUV.
ram
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Old 27th March 2008, 11:40   #4
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I don't think volumes is the concern here. The CR-V is doing good numbers even with a hefty price tag, if locally manufactured to the price of the prev-gen CR-V it would do wonders.
The reason why it is imported is because Honda doesn't not have the capacity to produce it here as yet and setting up local manufacturing would also cause delays. Honda jumped into this segment at the right time.
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Old 27th March 2008, 11:53   #5
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Quote:
Originally Posted by Sahil View Post
I don't think volumes is the concern here. The CR-V is doing good numbers even with a hefty price tag, if locally manufactured to the price of the prev-gen CR-V it would do wonders.
The reason why it is imported is because Honda doesn't not have the capacity to produce it here as yet and setting up local manufacturing would also cause delays. Honda jumped into this segment at the right time.
The Reason it is imported is because, This Honda is manufactured in its Thailand Facility and hence it is not practical to set up the same facility in India.

Plus, we indians are suckers to buy the brand, irrespective of cost. All Honda vehicles IMO are overpriced by atleast 20%, starting from the City to the Accord!
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Old 27th March 2008, 12:00   #6
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The CRV's current demand surely justifies local assembly. Its not a matter of "if", but of "when".
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Old 27th March 2008, 12:03   #7
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Quote:
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The CRV's current demand surely justifies local assembly. Its not a matter of "if", but of "when".
I'd doubt Honda do it, GTO, am willin to bet on it!
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Old 27th March 2008, 12:14   #8
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Chicken or egg? High price naturally equals low volumes, low prices in turn equal high volumes, if CRV is $50k in US its volumes will shrink in a jiffy so the logic is flawed. But it only $20-$25k or 8-10lakhs and has great volumes like it would in India if it were priced at 8-10 lakhs here.
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Old 27th March 2008, 12:20   #9
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Quote:
Originally Posted by headers View Post
The Reason it is imported is because, This Honda is manufactured in its Thailand Facility and hence it is not practical to set up the same facility in India.

Plus, we indians are suckers to buy the brand, irrespective of cost. All Honda vehicles IMO are overpriced by atleast 20%, starting from the City to the Accord!
So, the import duty if imported from Thailand is also 110%. I mean, is it varied across imports from different countries.

I'd assume a CKD or SKD route (don't if that works for four-wheelers, it does for two-wheelers surely), can bring down the cost significantly.

A long term solution would be to enter into a free trade agreement with these countries.

Quote:
Originally Posted by headers View Post
The Reason it is imported is because, This Honda is manufactured in its Thailand Facility and hence it is not practical to set up the same facility in India.

Plus, we indians are suckers to buy the brand, irrespective of cost. All Honda vehicles IMO are overpriced by atleast 20%, starting from the City to the Accord!
Couldn't agree with you more. All Honda cars are overpriced. It sells because of the perceived brand value. Heck, they cost a bomb even in the used car market! But nevertheless, very reliable cars, aren't they

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I'd doubt Honda do it, GTO, am willin to bet on it!
If they are thinking of getting the diesel sibling here along with the Accord Diesel (rumours are doing the rounds already!), the demand would surely shoot-up even more.

AFAIK, the petrol variants still sell huge numbers and quite outnumber the diesel competition from other manufacturer's stables.

Can only wait and watch. It would be awesome to buy the CR-V at 10-12 lacs (day-dreaming ). That would scare the hell out of the competition.

Quote:
Originally Posted by ram_hyundai View Post
The crv sales volume is too little for it to be made in India.Predominantly a diesel market for the SUV means they wont be that confident in setting up such huge facility for a petrol SUV.
ram
Perhaps you are right. But if Honda believes the CR-V diesel (the petrol is a hit, no doubt) would be a hit in India (which most would assume yes), and will be a long-termer (another 5-8 years in the market with upgrades every 1-2 years ... they did this with the Accord so many times now), a dedicated production facility makes a lot of sense.

The volumes would pick up significantly with a lower price point.

Last edited by theMAG : 27th March 2008 at 13:26. Reason: 20 minutes - SAME post
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Old 27th March 2008, 12:23   #10
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Quote:
Originally Posted by GTO View Post
The CRV's current demand surely justifies local assembly. Its not a matter of "if", but of "when".
Forget Honda. For models with low volumes now, what is lean and cheaper. Assembling here thru import of parts (easier as global suppliers have been developed) or local parts (difficult in the short term since component suppliers have to be developed) or importing a finishing product.
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Old 27th March 2008, 12:55   #11
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Thr CRV does not have a strong competitior so there is no pressure on Honda to set up an assembly line. If Toyota was to produce a compeitor locally ,Honda may decide to do the same. Since there is no such move by Toyata, Honda will continue to sell CBU's
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Old 27th March 2008, 13:57   #12
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Quote:
Originally Posted by headers View Post
The Reason it is imported is because, This Honda is manufactured in its Thailand Facility and hence it is not practical to set up the same facility in India.

Plus, we indians are suckers to buy the brand, irrespective of cost. All Honda vehicles IMO are overpriced by atleast 20%, starting from the City to the Accord!
India has a FTA with Thailand.

Does anyone know if this reduces the duty for CBU vehicles manufactured in thailand?

I'm guessing it does... since I read somewhere about a bike manufacturer importing bikes made in thailand. I think it was the kawasaki 250.
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Old 27th March 2008, 14:33   #13
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Originally Posted by simplythebest View Post
India has a FTA with Thailand.

Does anyone know if this reduces the duty for CBU vehicles manufactured in thailand?

I'm guessing it does... since I read somewhere about a bike manufacturer importing bikes made in thailand. I think it was the kawasaki 250.
The 250 Kwacker will be imported from thailand by Bajaj via the CKD ( Completely Knocked Down) route and not the CBU route.

If thats the case, the CR-V should be cheaper, isnt it? I am not sure.
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Old 27th March 2008, 14:36   #14
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Fortuner should do the trick if Honda is not doing it now,lol.Captiva could also be built in India which could motivate Honda to start crv production here.
ram
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Old 27th March 2008, 14:45   #15
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Quote:
Originally Posted by ram_hyundai View Post
Fortuner should do the trick if Honda is not doing it now,lol.Captiva could also be built in India which could motivate Honda to start crv production here.
ram
Again boils down to how much capacity do Toyota and GM have in India to produce these SUVs locally. I see Honda ruling this market for the foreseeable future (although its difficult to actually see the foreseeable future )
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