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Old 19th December 2008, 20:02   #1
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Default Will the launch of Honda Jazz bring profits back to HONDA

As we hear major car companys like Toyota & Honda face loss in this forth comming years is't it right time to launch Jazz and Yaris to boost the sales as small car in India will defienetly bring more no. of sales & in overall will be a boost to Indian Auto sector OR

are they going to postpone the launch of small cars bcz of recession?

What will be the stategy of this major Auto makers for India?

Is it wise to launch now or latter?
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Old 19th December 2008, 20:06   #2
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I don't think they are going to launch anything new. Factory setup, training and a lot of associated costs go with a car launch. I'm not sure they are going to spend that kind of money now.
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Old 19th December 2008, 20:22   #3
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Lots depend on the pricing front. Unlike the other segments, this is a market where there are many players and all of them are very competitive. Also they are more money conscious, so pricing is the main key.

Also I dont think they will be able to rake up so much volume to generate profits. The price will have to be low as the times are not perfect, and also the sales of almost all the car makers have dropped. So its not that easy and rather they will first have to invest a lot of money here.
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Old 19th December 2008, 20:31   #4
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another way to look at it would be that in these recessionary times, prospective customers might just want to go for a smaller car than a sedan. so it may well prove to be a good bet to invest and launch smaller cars than bigger ones
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Old 19th December 2008, 20:55   #5
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I am sorry if I am asking the wrong question.
But is HONDA MOTORS INDIA making losses or Honda Motors made a loss. I think it's the latter and Honda (India) is still making profit by selling the city..

But I agree they should introduce Jazz and pump in some money in growing markets like ours to increase India's share in their global revenue.
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Old 19th December 2008, 22:13   #6
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I am not sure how Jazz will help Honda in rising their profits. Jazz is costlier than City in all ASEAN markets, but here in India it is supposed to be other way round. I still doubt how is Honda going to reduce the cost and gain profit on Jazz.
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Old 19th December 2008, 23:07   #7
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Not necessarily. The recession has hit all manufacturers. The recession is the culprit which has reduced the number of cars bought at a period of time. So, even if the Jazz is a hit, the total number in sales and profit made will be just comparably better than other manufacturers.

So, only when the recession is gone and when people start buying cars again, will Honda get the big profits it was having before. So until then its gonna be down time for the entire industry with minimal sales.
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Old 19th December 2008, 23:45   #8
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Honda has already stated that they would launch the jazz earlier seeing the high demand for small cars in the country.
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Old 20th December 2008, 00:06   #9
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Default Honda postpones small car launch

Honda has officially postponed the launch of their small car project


The current economic slowdown and a subsequent dip in demand for automobiles have forced Honda Siel Cars India (HSCI) to postpone the launch of its first small car in the country. This is turn means that the company has delayed assembly operations at its upcoming plant in Rajasthan. Consequently, the small car, which was scheduled for launch in the fourth quarter of 2009-10, is expected to be delayed by two years. While Honda has put its capacity enhancement and assembly operations at its second plant in Tapukara, Rajasthan, on hold till 2012, players like Toyota Kirloskar Motors and General Motors India continue to be optimistic about the Indian market and have still not deferred their plans for a small car in 2010. In view of the recent economic slowdown, the company has decided to postpone the setting up of assembly line in Rajasthan and hence the roll-out of the company s small car in India by two years and may now launch the vehicle in the January-March quarter of 2012, says Jnaneswar Sen, senior general manager (marketing), Honda Siel Cars India. However, since the plant is under construction and the first phase is already under operation, the launch of the small car can also be pre-poned if the market conditions improve, he added. Honda is setting up its second plant in Rajasthan with an installed capacity of 60,000 units and an investment of Rs 1,000 crore. While the first phase, which included a paint shop and an engine plant and has been set up at an investment of Rs 600 crore, is already under operation, the second phase that will include installation of the machinery has been postponed. With December traditionally being a lean month as people postpone their purchase, the company has also decided to reduce production at its Greater Noida plant. HSCI is closely monitoring the market situation and will adjust monthly production volumes to respond promptly to market demands while ensuring operational efficiencies and low inventory levels, Sen added without divulging further details. Honda is not the only manufacturer to cut down on production to keep its inventory level under control. Two days ago, Toyota Kirloskar Motors had announced a 30% dip in production in December to offset the slowdown in demand. According to the Society of Indian Automobile Manufacturers, total passenger car sales in the country dipped 19.4% at 83,059 units in November as against 1,03,031 units year-on-year.



Source : http://in.biz.yahoo.com/081217/203/6z7j1.html
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Old 20th December 2008, 00:21   #10
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This is such a bad news. Mainly because the Honda Jazz has the potential to rewrite the rules of the Indian market reaction to premium hatches. The brand value that Honda enjoys in India, would sway a lot of entry level sedan buyers to the Honda hatch, just because of the H-logo.

Now it will be the slanted H logo that will have to make the shots, but then the Jazz would have been definitely more popular even at a higher price point.
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Old 20th December 2008, 00:27   #11
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I know that the Jazz if launched in India, would be a very popular car & many people , including yours truly, would be lining up to buy one.

But given the current global recessionary scenario, I think Honda management knows , what is better for their company in the long run, so that they don't go the Detroit Trio way.

And as far as the Hyundai's projected success (slanted'H' Logo) goes, if they don't price the i20 very competitively (which they didn't do with the initial launch of Getz), I see them selling Santro & i 10 s only.

Last edited by car_crazy1400 : 20th December 2008 at 00:30.
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Old 20th December 2008, 05:37   #12
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Quote:
Originally Posted by car_crazy1400 View Post
Honda has officially postponed the launch of their small car project


The current economic slowdown and a subsequent dip in demand for automobiles have forced Honda Siel Cars India (HSCI) to postpone the launch of its first small car in the country. This is turn means that the company has delayed assembl
.....................
Source : http://in.biz.yahoo.com/081217/203/6z7j1.html

Basically, Honda and many other car manufactures are in an impression that India's economy is very dependent on USA, i.e IT industry and many other Industries have reduced outsourcing to India from USA due to recession. Hence, they are doubtful on the spending power of the Indian people.

These doubts about India's future have caused them to postpone the project. If our foreign minister or any well wisher could convince Honda about India's future i.e showing details and proof about India's established and growing Industries and assure that the spending power of people will never slum. Then for sure these Manufacturers will come down to setup industry.

But, there is already a huge automobile Industry in India. And the average salary of the people employed are just OK when compared to that of IT employees. If needed, these Big Car manufactures can create an economy-chain and bring back the boom in India like how the IT industry did to India.


PS:
The IT workforce have disproved the long thought saying that "Indians do a lot of saving and are frugal". But the fact is, even though their salaries were low compared to that of abroad, they still purchased items, and also which where branded high end products. This shows that the spending power of Indians are better than other nations. So the same can be done to the automobile industry and hence creating an economy chain.

Last edited by ritz830 : 20th December 2008 at 05:38.
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Old 31st December 2008, 07:29   #13
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This is really a bad news....

I was waiting for the Jazz to be launched. If they position the car with a reasonable price tag (Unlike Fabia) I am sure that they are going capture the segment. Even in recession, by delaying the launch they are going to incur a huge opportunity cost, ie playes like Maruthi, Hyundai, GM or Tata may flood the market with better cars and after three years Jazz may not highlight enough differentiation. So ifeel this is the right time to launch the car and by the time the recession is over, the car will prove in Indian context and there will be an exponential growth.

Feel free to differ from my opinion......
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Old 31st December 2008, 10:17   #14
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I don't know about Honda global but looking at the features that Honda India gives in it's Indian cars and the prices charged, I say, they are already making super duper profits here even in these slowdown times!
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Old 31st December 2008, 10:32   #15
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bad news :(
Cant really understand the decision. India is a market where the brand itself (i.e. Honda badge) sells! It could have been a big hit here. Anyway the wait continues... I'll to contend myself with the other H.
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