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Old 4th November 2009, 09:58   #271
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M&M is awash with $$$

Q2 F2010 – M&M Standalone results
The Gross Revenues and Other Income of Mahindra & Mahindra Ltd. for the quarter ended 30th
September 2009 is Rs.5188.9 crores as against Rs.3935.0 crores during the corresponding period last
year – a growth of 31.9%. The Profit before tax excluding exceptional items for the quarter is Rs.862.5
crores as against Rs.235.9 crores in Q2 last year – a growth of 265.6%. During the quarter, the
company sold 33,69,191 equity shares from out of its holdings in its subsidiary Mahindra Holidays and
Resorts India Ltd. (MHRIL) as a part of the IPO of that company at a price of Rs.300 per share. There
was an exceptional profit before tax of Rs.90.8 crores arising from this sale. After considering exceptional
items and providing for tax, the net profit for the current quarter is Rs.702.9 crores as against Rs.205.7
crores in Q2 last year – a growth of 241.7%.
The outstanding financial results of the company for the quarter are largely due to a strong sales
performance by both Automotive and Farm Equipment Sectors and the company’s continued and
relentless focus on cost reengineering and cost control.
In the current quarter, the company recorded a volume growth of 43.7% in the Utility Vehicles segment
against an industry growth of 21.4%. It sold 55,280 UVs in Q2 F2010 as against 38,462 UVs in Q2 last
year and thus reinforced its dominant position in the market by increasing its market share to 64.9% in the
current quarter from 54.8% in Q2 last year. The volume and market share growth of the company was
driven by the excellent sales of Xylo as well as the refreshed version of the Scorpio and the all time
customer favourite ‘Bolero’. In the pick-up segment, the company strengthened its leadership position
with a volume growth of 26% and a market share of 82.2%.
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Old 4th November 2009, 10:08   #272
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Originally Posted by autocarcr View Post
Well if at all Linea sales has decreased, it has decreased because of the impending release of a more powerful T-JET as revealed by me in my scoop (3rd page of thread list) and confirmed by Autocar.
Wow. That is some reasoning. If what you say is true why should sales pick up next month?. It will be an even bigger drop since you have presented a scoop that T-Jet is coming in Jan. Surely the enthusiasts who largely seem to be buying car this would definitely want the T-Jet. I am sorry I don't agree with this logic. As far as I can see, it is clearly the Manza effect.

The effect is from 2 persepectives
1. Consumer: A consumer walking into a Tata Showroom will see both the cars with same engine, almost similar features, but the Manza priced at ~ 2L lower than the Linea. There is a good probability that the value conscious consumer may switch to a Manza and save the extra money. (Just see what happened to SX4 after the Dzire was launched)
2. Dealer: A dealer will have a certain amount of funds that he can plough into his business. He may increase the investements when a new product comes in but then he will prioritize his money based on how easily he believes he can sell the product. In this case, it is easier for a Dealer to push the Tata vehicle especially when it is loaded to the brim at such an attractive price. So better ROI
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Old 4th November 2009, 10:32   #273
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I honestly think it has a lot to do with the features and specifications offered. The Jazz is an excellent car but what a customer starts to think is that for 1.5L more, I can get a larger and more powerful engine, a large boot and the perception of a big car.

I think to make the jazz sell like the ANHC, may be add some of the "v" elements or even more than the V in the Jazz and as an option give the fantastic 5AT box for a realistic price increase.

The addition of the features and unique 5AT will justify the premium amount of the jazz and will be a great buy for people who need all the elements of the ANHC in a smaller package.
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Old 4th November 2009, 10:47   #274
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Originally Posted by GTO View Post
M&M is awash with $$$
With all those $$$ and resources, I wonder, why don't Mahindra build their own passenger car?
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Old 4th November 2009, 11:59   #275
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Its mainly due to 'so-much-for-a-hatchback' factor. Though i20 is an expensive hatchback, its justifiably kitted. Jazz buyers going for City is helping City sell more. I think Honda's strategy is low-margin-high-volume ('low' = 'relatively-low', in Honda terms!) for City and high-margin-low-volume for other models. So Honda is making more money than without Jazz, anyways. This is probably why Honda has still not corrected the pricing of Jazz (may be its a little early too). Lets watch out for the face-lift.

Also, Honda is little too late in the game for hatchbacks, where Maruti and Hyundai are very well accepted (both for pricing and reliability). Premium hatchback being a crossover segment, is a very small market and asking for 'premium' is not going to work. Without Jazz, I dont think i20/Fabia would have sold so much. If at all Honda wants numbers for Jazz, there is no better option than adding more features at the same price. If Honda wants to win here, they should face-lift(a proper one) it soon, with a nominal increase in price, say ~10K and offer free insurance.
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Old 4th November 2009, 12:36   #276
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My personal view - just see the rise in sales of City after Jazz was launched. Jazz seems to bring additional customers to the showrooms/dealerships - but ultimately those customers end up buying City.

I was at the dealership today - believe it or not, any color for City has a waiting period. Haberno Red waiting period is 6 weeks - too much!
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Old 4th November 2009, 12:53   #277
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Honda thought of ripping our Indians by pricing the JAZZ at the premium level. Should be good lesson for Honda as its is concerned.
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Old 4th November 2009, 13:30   #278
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Originally Posted by ACM View Post
Frankly the jazz is over priced by a clean Rs. 1L and a downward price revision on that front would sort out things and they could even beat the I20, but is may be too late.
Don't think that's gonna happen though since it will erore the brand equity... no ones wants to buy a cut price honda... remember the Cielo fiasco?
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Old 4th November 2009, 13:33   #279
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Originally Posted by psp62in View Post
It is now very clear that the Honda has not been able to sell Jazz to the extent they anticipated at it's launch in June-09. Throughout its sales have been lower than its sibling City. And While in Oct-09, the sales seem to have picked up a little bit from previous month (from 500 to 800), the increase fades away in comparsion to the jump ANHC has seen in the same month (from 4300 to 5200) despite a price increase. (see attached file)

Jazz is supposed to have the same technology as City, has a better cock-pit, better and clever utilization of space, magic seats etc. The things that go against it may be that its is a hatchback and not sedan, and the price is much higher than other hatchbacks. But if you compare the competition hatchbacks with Jazz, the Jazz has many better features and specs.

Also the City too is priced at a relatively much higher level than its competotors in the sedan category. So the logic of high price fails to apply to ANHC.

I think similar sales trends of Jazz vs ANHC exist in other Asian countries where the two products are selling side by side.

It would be an interstsing study from marketing point of view as to why Jazz is not selling while ANHC is.
Specific to your comparison of ANHC vs JAZZ Sales (why the disparity??) ;

1. Honda never wanted JAZZ to eat into ANHC Sales. From the Sales Figure we can see that , thats exactly how it has turned out !

2. Why JAZZ in itself is not creating a space of itself in its segment is because of :
a. the mindset that HAtch is alwayn inferior to a Sedan (a sedan gives you a jump to the next segment).
b. options like Linea with Very High End features that makes it compete with the ANHC itself and being available at the Price of JAZZ or lower . (Even ANHC lacks these features compared to Linea). and then there are the Fiestas and SX4 in the same price band.
c. So anybody looking at a 8 lac + car is looking at upgrading from his old hatchback and wont be looking at entering the HAtch segment again. JAZZ gets ruled out there.

I personlly feel that JAzz is a good package even at the price and dont have an issue with its Hatch look. Infact i used to hate Sedans (Linea is an exception) and JAzz very much appeals to me .

Last edited by FastLove : 4th November 2009 at 13:37.
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Old 4th November 2009, 15:03   #280
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Un-doubtedly The price is prohibitive. One could almost buy two Grande Punto Actives for the cost of one Jazz- if wants too. Alternatively you could save a good amount of money(close to 25% on the cost of Jazz) even after buying a high end diesel variant of Punto. Besides, Jazz is also slightly smaller than Punto in terms of wheel base and overall length apart from fairing poorly in the Ground Clearance (160 as against 173mm of Punto's). Honda's expectation of premium for their brand is very much away from the reality of Value for Money from any customer point of view-not only Indian Customers.
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Old 4th November 2009, 15:31   #281
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Default I am quoting what Honda Management said when it was launched.

Honda Jazz
Price: Rs6.98 lakhs to Rs7.33 lakhs

Variants: Jazz basic,jazz sport and Jazz mode

Expectation: Half the number of city. 1200 -1500 units a month

We expect the customer of a Jazz to be an owner of an executive car looking for a second car, which will probably be a compact car. Its unlikely the Jazz customer will be a first-time buyer. Itll take time for this premium segment to gain acceptance. We are willing to wait for three-four years for this to happen, Honda Siel President and CEO Masahiro Takedagawa said.

I think most of us would agree to that after 5 months of launch
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Old 4th November 2009, 16:01   #282
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Mr. Takedagawa,Is definitely playing yet another marketing ploy on Indian customers.
Firstly, Honda is not a premium brand in any case. Their premium brand is Acura. Its very unfortunate that Skoda and Honda seem to be branded premium in India. In US the Honda fit (Jazz version in US with 1.5 L engine) is considered the cheapest entry level car, and is preferred by Lady buyers only.
Secondly (thanks to Maruti/TATA ) for us Indian buyers especially hatch back segment the single most governing factor is VFM. Considering the cost of fuel, the taxes on our cars in comparison with our average income this is very understandable.
There are also some serious issues with the Jazz, the back seat is very uncomfortable, Its designed more like a back seat in an MUV rather than premium hatch. The engine doesn't fell premium one bit, it rather feels puny.
When you can get an Cruze, Lenia at the similar pricing I don't see any reason why one should settle for Jazz.
So I dont think Honda ever has a chance to make big numbers in Indan market unless thy re work thier pricing.
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Old 4th November 2009, 16:26   #283
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No surprises for guessing.
In India Vit M plays the utmost factor in the whole decision making process.
At alsoe to 8 lcs, I would never want to invest in a hatch irrespective of the fact that it is a Honda.

no wonder the Jazz doesnt sell....

Look at the Fabia for instance.
The Skoda baby started off as a Rs 6Lac + hatch.
The current scenario is that the prices are slashed to just a shade over 5 lacs
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Old 4th November 2009, 19:15   #284
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GM sales breakup for October month
Spark - 4231
Tavera - 1161
U-va - 599
Aveo - 377
Optra - 163
Captiva - 110
Crusze - 812
impresive numbers for captiva...

Last edited by Jaggu : 4th November 2009 at 20:45. Reason: Removing [Font] tags, avodi copy paste from external font editors, use preview before submitting posts. Thanks
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Old 5th November 2009, 11:10   #285
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Originally Posted by nurni76 View Post
1. Consumer: A consumer walking into a Tata Showroom will see both the cars with same engine, almost similar features, but the Manza priced at ~ 2L lower than the Linea. There is a good probability that the value conscious consumer may switch to a Manza and save the extra money. (Just see what happened to SX4 after the Dzire was launched)
I would agree to that. When I walked into the Tata showroom for the GP I was tempted to have a look at the Vista for the value it offered. Had it not been for my dad's dislike towards Tata (which I still do not understand why!) I might have even chosen Vista.
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