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Old 22nd February 2009, 23:33   #1
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Default Honda to raise car prices, and Jazz launch soon. EDIT : Jazz spotted testing on pg.14

Source: LiveMint (by the hindustan times)


Honda plans to raise car prices in India


The Honda Siel CEO sees the downturn lasting for another 6 months & points out that his firm caters to buyers in the premium segment, where the impact of an economic slowdown is tempered


New Delhi: Faced with a contracting demand for cars in India, Honda Motor Co.’s unit here expects to raise prices on its models and maintain slower production for the next six months, even as it keeps its plans for its small car, christened Jazz, unchanged.“Devaluation of rupee is impacting our business because 20-25% of our components are imported from Japan and Thailand. We need to adjust this cost impact,” Masahiro Takedagawa, president and chief executive of Honda Siel Cars India Ltd, said late on Saturday evening at a company awards function. “For the CRV it (the price increase) will be substantial.”


Honda Siel is working out the price increase for the other models but customers who had ordered the new model of the Honda City will be protected. Launched in November, the City, which has sold 12,233 units, helped Honda lessen the impact of the slowdown.‘Devaluation of rupee is impacting our business because 20-25% of our components are imported from Japan, Thailand.’In the Indian market consumer confidence has come back slightly, Takedagawa added. Still, the company has seen sales of its models, other than the City, decline sharply. Its total sales in January fell by one-fourth, to 5,773 units when compared with the same month last year. This resulted in the company cutting production at its Greater Noida facility, which is operating on a single shift from the start of this year. It now makes about 200 cars a day instead of the earlier 380 cars.


The production cuts have helped the company trim its inventory to four weeks. Once car sales pick up, it’ll take Honda two months to get back to a two shift production schedule, Takedagawa said. The Honda Siel CEO sees the downturn lasting for another six months and points out that his firm caters to buyers in the premium segment, where the impact of an economic slowdown is tempered. Even so, “customers are concerned with global economy so they have become naturally cautious”, he said.
Honda continues to push ahead with plans to launch the Jazz, a premium hatchback car. Trial production has started, Takedagawa said. Its 1.2 litre engine has been tailored to Indian regulations to avail of a 12.5% tax rebate.


Like its global counterparts, Toyota Motor Co. and General Motors Corp., Honda has also been wracked by slowing sales in India. But unlike them, it managed to close 2008 with a positive growth in unit sales due to its bike business.
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Old 23rd February 2009, 00:29   #2
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which jazz is it? the new shape model or the older version?
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Old 23rd February 2009, 00:34   #3
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The CRV is already overpriced, anymore and it will defiantly affect the sales figures big time. With no diesel option, good competitors like the Captiva A/T and upcoming fortuner, Honda will kill their product by their over confidence. Local assembly is the only solution!
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Old 23rd February 2009, 00:38   #4
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Originally Posted by Sahil View Post
The CRV is already overpriced, anymore and it will defiantly affect the sales figures big time. With no diesel option, good competitors like the Captiva A/T and upcoming fortuner, Honda will kill their product by their over confidence. Local assembly is the only solution!
you havent heard about i-dtec CRV 2 litre diesel?

captiva is a front wheel drive "SUV" and not a 4wd! oh made in korea chevy!
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Old 23rd February 2009, 01:02   #5
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Originally Posted by GeekSrik View Post
Source: LiveMint (by the hindustan times)
...Faced with a contracting demand for cars in India, Honda Motor Co.’s unit here expects to raise prices on its models and maintain slower production for the next six months...
Hmm, when faced with contracting demand, I would have expected them to reduce prices.
However,
Quote:
Originally Posted by GeekSrik View Post
...“Devaluation of rupee is impacting our business because 20-25% of our components are imported from Japan and Thailand. We need to adjust this cost impact,”...
this is forcing them to up the prices.

It will be interesting to see if this drives up the prices of Jazz to more than what is being speculated.

Going by this logic, isn't Toyota also affected by the devaluation of the rupee? Infact any manufacturer who sources any component from abroad ought to be hit by this phenomena.

Does anyone think that this loss can be offset by exporting cars from an Indian manufacturing base?
Does HSCI have any export operations from India?
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Old 23rd February 2009, 09:50   #6
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Honda has the pricing command, Indians have already given them the same. If we were to outright reject the ANHC, at say the current price levels, they wouldn't have dared to increase prices further. But all said and done, we are happy to pay for the H badge..
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Old 23rd February 2009, 10:20   #7
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Quote:
Originally Posted by Parm View Post
you havent heard about i-dtec CRV 2 litre diesel?

captiva is a front wheel drive "SUV" and not a 4wd! oh made in korea chevy!
I certainly have heard of the i-dtec but it seems Honda India themselves haven't heard of it. There have been rumors about it being launched for a while now but Honda claims our diesel fuel quality aint good enough for them! For christs sake, even complex german diesel engine run fine on our fuel.

Btw, I did compare the CRV to the Captiva AUTOMATIC in my post which certainly is 4wd ! Most buyers won't ever need the 4wd option on the CRV because of the roads they travel on, besides try taking the CRV on terrains that would excerise it's 4wd skill and it will scrap all over.
Don't use Captiva's korean build to it's disadvantage just yet, test drive one and you'll know it feels much better built than the Japs.

Last edited by Sahil : 23rd February 2009 at 10:23.
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Old 23rd February 2009, 10:30   #8
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I hope Honda can keep the Jazz pricing competitive enough to take on i20, Swift etc. Honda should not get the pricing wrong, like Skoda has got it wrong for Fabia.
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Old 23rd February 2009, 10:50   #9
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Quote:
Originally Posted by Sangre View Post
Going by this logic, isn't Toyota also affected by the devaluation of the rupee? Infact any manufacturer who sources any component from abroad ought to be hit by this phenomena.

Does anyone think that this loss can be offset by exporting cars from an Indian manufacturing base?
Does HSCI have any export operations from India?
Toyota is affected. I believe they raised prices at the beginning of the year.

Honda doesn't have any export operations.
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Old 23rd February 2009, 11:39   #10
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Originally Posted by vineethvazhayil View Post
Honda has the pricing command, Indians have already given them the same. If we were to outright reject the ANHC, at say the current price levels, they wouldn't have dared to increase prices further. But all said and done, we are happy to pay for the H badge..
car manufacturers quote an increase in cost due to one parameter (in this case forex rates) to pass on increase to customers. Declines in other areas (steel & other commodity prices, wages (??) etc) do not seem to matter at all

At the same time it is goodto note that the prices of the City will not be affected. Guess competition and localisation have proved helpful to the customer here.
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Old 23rd February 2009, 12:50   #11
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Quote:
Originally Posted by Parm View Post
you havent heard about i-dtec CRV 2 litre diesel?

captiva is a front wheel drive "SUV" and not a 4wd! oh made in korea chevy!
Aren't we talking about Captiva A/T which is AWD ?
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Old 23rd February 2009, 13:14   #12
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Quote:
Originally Posted by Ardy View Post
I hope Honda can keep the Jazz pricing competitive enough to take on i20, Swift etc. Honda should not get the pricing wrong, like Skoda has got it wrong for Fabia.
There's no way that the Jazz will be in the same price bracket as the Swift or the i20. Honda, like Skoda, will always expect its buyers to pay a premium over offerings from other manufacturers. India will be a unique market for the Jazz. Worldwide the Jazz is pricier than the City. However the reverse is going to be true here.
I have always wondered, if India is a mature enough market for premium hatch backs? Skoda has already displayed that it isnt, with the Fabia selling quite poorly.
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Old 23rd February 2009, 14:56   #13
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Originally Posted by Maverick1977 View Post
I have always wondered, if India is a mature enough market for premium hatch backs? Skoda has already displayed that it isnt, with the Fabia selling quite poorly.
Jazz will get 1.2 l petrol to enable tax benefits of 12.5% . Other engine options are still not confirmed. India is surely maturing for the premium hatch market. It would nt be right to just come to conclusion from sales of Fabia, because Fabia itself doesnt fit the premium: it doesnt have refined engine(petrol /diesel) , its A.S.S. aint great , pricey!! Top of that Fabia localisation content is quite low .

We can conclude about premium hatchbacks once Fiat Grande Punto, Honda jazz & hopefully VW Polo are on our roads. Right now its only i20 vs Fabia.
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Old 23rd February 2009, 15:05   #14
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Paying a million bucks and buying a hatch back would be a difficult thing for society to digest in India. Till the time people don't have the mindset to accept that, premium hatches are difficult commodities to sell over here.
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Old 23rd February 2009, 15:27   #15
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will the increase in price hold good for ANHC and civic ??
civic number is reducing month by month...
ANHC price rise will lead other to linea on a platter..
the only advantage of ANHC over linea will be the A/T(in case of price rise)
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