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Old 3rd October 2009, 11:12   #16
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Originally Posted by mithun View Post
Another reason why cos don't want to kill a product is because they don't want to be branded as one who will also kill the resale value since resale is one of most important factor that decides the vehicle purchases in India alongside FE !
Killing the older model doesn't always kill resale. The OHC is a case in point.
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Old 3rd October 2009, 11:19   #17
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Killing the older model doesn't always kill resale. The OHC is a case in point.
OHC & Qualis is an exception but not for every car !
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Old 3rd October 2009, 11:21   #18
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Killing the older model doesn't always kill resale. The OHC is a case in point.
'the' zen too. in fact its resale value increased after the estilo came in.
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Old 3rd October 2009, 11:22   #19
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Models are updated abroad. Me thinks the big guys dump some of the old designs in India including the machinery. From India who will they dump it on ?
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Old 3rd October 2009, 12:27   #20
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What's there to 'blame' the average Indian customer for, when he chooses to buy the older version rather than the new??

Do we have to pretend that people have nothing like 'budgets'? I'm sure all of us on this forum too are 'average' enough to have tight budgets - else, we would be a forum of only BMWs, Mercs & Porches, no? What is it with self-righteous people who think it's wrong for a consumer to buy something of which a new version has been launched?

I think this thinking has more to do with vain concepts like being 'to-date' even with the purchases one makes, which breeds some kind of contempt for those who act otherwise - even if it makes for better common sense.

Last edited by skandyhere : 3rd October 2009 at 12:30.
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Old 3rd October 2009, 12:40   #21
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Originally Posted by flyingspur View Post
I'm not a major Honda fan, but this is one thing for which I always give credit to Honda. Constantly upgrading their model line-up. With replacements and not selling old stuff parallel with their new offerings.

What's so commendable about that?

The reason that cars continue to be sold is that they become more affordable as they age. Even at the same price point, they become cheaper as the value of money decreases. So as time passes by the target segment changes.


For eg: when M800 came out the social elite were the ones buying it. As time passed by it sold coz it became affordable to the masses. The same logic applies for other cars. But the same logic would not be applicable to all cars in the market. Especially the more expensive cars. Probably that's the reason Honda and Toyota didn't do it. In the end it is all driven by economics. All companies will do it if it's gonna give them more profit.



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Originally Posted by skandyhere View Post
What's there to 'blame' the average Indian customer for, when he chooses to buy the older version rather than the new??

Do we have to pretend that people have nothing like 'budgets'? I'm sure all of us on this forum too are 'average' enough to have tight budgets - else, we would be a forum of only BMWs, Mercs & Porches, no? What is it with self-righteous people who think it's wrong for a consumer to buy something of which a new version has been launched?

I think this thinking has more to do with vain concepts like being 'to-date' even with the purchases one makes, which breeds some kind of contempt for those who act otherwise - even if it makes for better common sense.


Precisely the point I was trying to make. Somebody might buy an Alto knowing that the A-star is its newer version because it makes more sense to him in his budget. Not everbody is looking for the same thing.

Last edited by burnt. : 3rd October 2009 at 12:43.
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Old 3rd October 2009, 12:41   #22
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Originally Posted by flyingspur View Post
I'm not a major Honda fan, but this is one thing for which I always give credit to Honda. Constantly upgrading their model line-up. With replacements and not selling old stuff parallel with their new offerings.
I agree with you cent percent. i was thinking the same about Honda.
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Old 3rd October 2009, 13:11   #23
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It is actually costlier for a car company to keep multiple generations of the same model in production. But market dynamics force some of them to do it.
In India, used-car market is very strong primarily because Indian consumers are VFM seekers. Car manufacturers face a tremendous amount of price pressure from used-car market. So they fight back by creating a whole new market - brand-new older generation car at a VFM price. Add to that, many car companies are also entering the used-car market (Maruti, Hyundai etc.) in an attempt to control prices (and may be inventories too) in this market. Today for the same model, customers get the following choices in the market
1. Buy a latest generation brand-new car
2. Buy an older generation brand-new car
3. Buy a latest generation used-car
4. Buy an older generation used-car

So, you see the same model is now available to a much wider customer base (based on their pocket size) and some car manufacturers are playing in all the four markets. This 4-step to the latest models also plays a ladder for 2-wheeler customers to graduate to the cars expanding the car market in India.

Honda, Toyota, BMW, Merc and some others are not playing this game as they want to position themselves only to the premium/executive segments who are not so much price sensitive. Only exception appears to be Skoda - not sure what their strategy for India is. They position themselves as a premium brand in India (not anywhere else in the World) but continues to sell older generation Octavia to Indian consumers. It may be because they don't have a new product in 10L-13L band (where Toyota and Honda dominate) and they just don't want to miss out on that customer base that is being nurtured by the marketing $$ from Japs.
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Old 3rd October 2009, 13:58   #24
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People like BMW, Merc that really dont produce anything here (they may have 'factories') dont really have a choice because their global factories dont produce old models, they retire them. It is like asking Intel to supply 486 CPUs

They cannot obviously keep a line open just to produce few hundred cars for India. To that extent, they are not doing anything good or better than Tatas, just doing what makes economic sense to them.

Toyota / Honda I am not sure if this description applies because they produce here and also they may have a third world factory somewhere that can ship outdated models as CKUs. So if they do phase out junks, it is a conscious decision, we should praise them for that..
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Old 3rd October 2009, 17:59   #25
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Originally Posted by burnt. View Post
What's so commendable about that?
As I said, I'm not much of a Honda fan, but here goes.

What's commendable, is that we get the best tech available to them with not so much of a premium over the competition (Jazz is an exception).

What's commendable, is that they've built a reputation, and a solid one at that - not a hollow one - of being innovative in their products and continuously offering the customer the latest and best offerings they have.

What's commendable, is that we think of Honda as a premium brand (man I hate that word, but it's true) because while there have been three whole generations (3.5, if you count the ZX) of the City since 1998. In comparison, OTOH we're still under the impression that Hyundai is lagging behind, still selling its age old Accent without much change, while the "new" Verna is hardly worth talking about in petrol guise and sells only because of the mad CRDi.

What's commendable is that they've repeatedly pioneered tech in their segment, for example padle shifts in the Civic. You may argue that the utility is close to zilch, but its novelty is enough to get people to splurge on the A/T.

Finally, whats commendable is that Honda doesn't always hike prices. The NHC/ZX were a segment lower than the OHC, and the ANHC is only taking the game back to where the OHC played it to begin with.

A shining example of a company that suffers because of persisting with old products is Mitsibishi. And more often than not, it's a case of too little, too late for them.
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Old 3rd October 2009, 18:09   #26
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Quote:
Originally Posted by flyingspur View Post
As I said, I'm not much of a Honda fan, but here goes.

What's commendable, is that we get the best tech available to them with not so much of a premium over the competition (Jazz is an exception).

What's commendable, is that they've built a reputation, and a solid one at that - not a hollow one - of being innovative in their products and continuously offering the customer the latest and best offerings they have.

What's commendable, is that we think of Honda as a premium brand (man I hate that word, but it's true) because while there have been three whole generations (3.5, if you count the ZX) of the City since 1998. In comparison, OTOH we're still under the impression that Hyundai is lagging behind, still selling its age old Accent without much change, while the "new" Verna is hardly worth talking about in petrol guise and sells only because of the mad CRDi.

What's commendable is that they've repeatedly pioneered tech in their segment, for example padle shifts in the Civic. You may argue that the utility is close to zilch, but its novelty is enough to get people to splurge on the A/T.

Finally, whats commendable is that Honda doesn't always hike prices. The NHC/ZX were a segment lower than the OHC, and the ANHC is only taking the game back to where the OHC played it to begin with.

A shining example of a company that suffers because of persisting with old products is Mitsibishi. And more often than not, it's a case of too little, too late for them.

I think you missed the point. I wasn't saying that there is nothing commendable about Honda. Rather, I was saying that there is nothing commendable in stopping sales a car while launching the newer model. If people still want the older model they should sell it. People buying the older model maybe buying the older model maybe buying for a wholly different reason. Classic case of that being the Alto. Lot's of people buying the Alto might not want to stretch their budget to buy an A-star. Hence the Alto continues along with A-star. But people buying the ANHC are the same people who were buying the City Zx. The target segment is pretty much the same. Hence it makes no sense in continuing it. While it made sense for Maruti to continue with the Alto. So doing this doesn't make Honda special in this regard.
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Old 3rd October 2009, 18:35   #27
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Hi Traxter

Thats a great point.

I actually feel that the management courses does help in understanding the point.

Same model or similar ones are churned out repeatedly as its like a "Cash cow" for the company.

Low or minimal investment o R&D and whatever you cash in is the profit.
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Old 3rd October 2009, 20:32   #28
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@burnt - The replacement of Toyota / Honda vehicles (while they're at the top of the charts, no less) with newer models which do even better and are even more successful, is what makes these two companies innovative, fresh and premium from the consumer's perspective. OTOH, companies like Maruti are successful and do good business with their numbers and revenues, no doubt, but the consumer perception is that they sell old vehicles for ages and ages, and get stagnant sometimes. That's the point I was trying to make.

There's nothing wrong with what MSIL / HMIL do. It's their way of doing business. It doesn't help consumer perception, that's all. As long as they're clocking the numbers, why should they care?
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Old 3rd October 2009, 22:39   #29
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Unhappy Old and New - Live together in (dis)Harmony

Please do add

Accent --> Verna
Octavia --> Laura
Getz --> i20

to the list.
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Old 3rd October 2009, 22:40   #30
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As has been mentioned already, it is down to market dynamics. There exists a demand and older models therefore sell. Don't see much wrong with that as long as the old models meet the basic emission requirements and suchlike.
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