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|4th March 2010, 16:40||#16|
Join Date: Jul 2009
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All Honda products in India have premium pricing and people in most cases pay up willingly because of the brand image it has created (primarily via the City). When it comes to the "larger" cars like City, Civic and Accord the target market usually doesn't mind paying the higher prices to sport the straight H on their front grille and the reputation for trouble free cars. However, as most manufacturers have realized, the hatchback market is very price and value focused.
To have a large number of sales in this market, either the price needs to be low or there need to be a large number of features available which gives the feeling of value for money.
With the way the Jazz pricing and stock accessories are currently structured, the mass market will not perceive "value" and hence avoid purchasing it.
If Honda wants the car to sell in high numbers, then they will need to reduce the price and/or add more features to the stock model.
On the other hand, if they have high enough margins with the current pricing, they might not really mind the lower sales since per car profits would be higher.
|4th March 2010, 16:45||#17|
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Honda completely misjudged the small car segment, even though it falls under the Premium hatch segment Honda total failed to understand its customers and came up with a ridiculous pricing strategy.
In small car segment people looks for value for money at a lower cost. Pricing a hatch at sedan prices had naturally very few takers. Thus last 6-7 months sales figures have shown that this car is doomed sales wise.
Honda can bring down a lower trim model and with some localization the prices can be lowered by least 1.5- 2 lacs to be in the market.
Else game over for Jazz.
|4th March 2010, 16:50||#18|
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But, isn't failure (if this is the correct word) of Jazz is also due to the fact that there were highly competitive premium hatchbacks available in the market ? I am referring to Fiat Punto and Hyundai i20.
I have seen at least 4 folks who were waiting for Jazz to be launched for few months. And when it was finally launched, they compared it with other available options and went to either Punto or i20.
Clearly, Honda was complacent with the success of City.
|4th March 2010, 16:55||#19|
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The problem with the Jazz is simple : Its 1.25 - 1.50 lakhs too overpriced. Couple that with a premium hatch like the i20, whose fully loaded variant is cheaper than the Jazz by over a lakh. A Jazz that is sold without alloy wheels or even a parcel tray.
Ajmat had posted in another thread of how a brand in the UK corrected its pricing by:
- Bringing it down to more realistic levels
- Sending existing owners vouchers, of the difference between the old & new price.
Honda should just admit its mistake and move on.
|4th March 2010, 16:58||#20|
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I think the Indian public is more cost and Fuel Efficiency consicious and Honda had gone wrong horribly on both. Add to that the waiting period was about 40 days which made it nearly impossible to sell even to the so called "higher middle income group".
When I had gone to take the test ride of Jazz and expressed my reservations regarding the pricing I was told cooly to take it or leave it but there would be no price negotiations. Also Honda had made it quite clear during the lauch that the competition for Jazz was from NHC itself and not from other cars. Jazz was mainly for the Honda fans and not to real car enthusiats. To make matters worse there were some good lauched by Fiat, Maruti, Tata which took the customers further away from Honda Jazz.
|4th March 2010, 17:16||#21|
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i think with the launch of polo honda jazz is going to suffer more as people who go after the brand will go for vw which is better priced than honda jazz and also reasonable loaded
|4th March 2010, 17:24||#22|
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why have a "premium hatch" which is beyond premium?
at 8L, why would one buy a Jazz. for one i know i wouldnt. Yes its a great car, for the city. IMHO, the price should have been around 6.5OTR, thus giving it a LOT more street cred at a hatchback. Premium can be in the quality and quantity of Gizmos that have been fitted in.
|4th March 2010, 17:30||#23|
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I am sure Honda is aware of the mistake they have done with the Jazz. But will they try to atone for their sin by reducing the price on the Jazz? I dont think so. I wouldnt be surprised if Jazz made an exit from the Indian market if sales do not improve. Maybe, Honda might have learnt a thing or two from this debacle that they can incorporate in their to-be launched small car.
Like GTO said, Honda will admit its mistake and move on(to other things) but not bring down the price on the Jazz.
Last edited by rr_zen : 4th March 2010 at 17:32.
|4th March 2010, 17:48||#24|
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Had they priced the city a bit above or on par with the petrol fiesta or verna or even the SX4 at around 8-8.5 L, the SX4 or fiesta sales would ve been more affected. They could ve plonked a smaller capacity petrol engine in the city and kept the say turbo-charged ivtec as a hot model on par with the corolla or say lancer, this would ve been an entirely different ball game.
As far as the JAzz is concerned it is too overpriced for what u get, especially the engine. Infact honda had mentioned earlier that its more expensive (than the new city) for them to manufacture Jazz in India as the quality of parts are more than that of the city and they are not getting any real profit for the Jazz. May be honda does not want to sell the JAzz at all.. and thats why I think they are keeping quiet..
|4th March 2010, 18:01||#25|
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I checked carwale for a few minutes. In the 8-11lakh "sedan" market the current options are (Petrol and Diesel) :
2. Skoda Octavia
3. Toyota Corolla
4. Fiat Linea
5. Maruti SX4
6. Ford Fiesta
7. Hyundai Verna
8. Chevy Optra
9. Mitsubishi Lancer
Given that the last 6 do not put you into the "i-own-a-premium-sedan" category, no wonder ANHC sells as much as it does. This is a sizeable community and that ANHC is an extremely competent product, the charm works. People who can stretch want the ANHC.
Further, the City has been an established model introduced before or along with a lot of cars listed in the sedan category above and has proved worthy. It has carried the "premium" tag for long.
I doubt if there is such a large community in the "i-own-a-premium-hatchback" category if there does exist any such in the first place (I have my doubts owing to the failures of the Optra Magnum & Fusion). Assuming there is, list the cars, compare the features, prices and it gets clear why the Jazz rolls all the way down!
The story with Jazz is different since its pitted against already established hatchback manufacturers who are now providing hatchbacks in all the segments. The small to the premium! A case in point, Hyundai with its Santro to I20. The jazz simply does not rake up in points against I20 nor does Honda hold the de-facto premium tag all alone! Further, quite a few buyers of say an i10 or Getz, will atleast consider stretching to reach the I20 Magna which itself is quite loaded. Honda does not have this advantage. Their hatch isn't even considered as an option by the "real" hatch buyers. Its sitting plum in the sedan category with no real features to tempt a sedan buyer.
They probably miscalculated in introducing an expensive and not-so-loaded hatchback with a "premium" tag while not being the first to do so! What they didn't realise is "premium" hatch doesn't mean out of reach for most.
Upping the features wont help. The way forward seems to be relaunching the Jazz at an appropriate price point. Probably, the way GTO mentioned with a PR exercise to go along with it. The consumer is ruthless! Or i'm saying complete nonsense since Honda never ever even secretly wished for hatchback like numbers.
Last edited by Nilesh5417 : 4th March 2010 at 18:04.
|4th March 2010, 18:06||#26|
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I heard that they stopped production of the City's base model due to the price clash with the Jazz.
|4th March 2010, 18:09||#27|
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It's obvious that Honda priced the Jazz way to high and killed an excellent car. The only way out in my opinion is to correct the price, I am sure this will hurt Honda ego. They need to understand the Indian hatch customer mentality, where price rules. Hope Honda wakes up and put some life into Jazz sales chart.
|4th March 2010, 18:21||#29|
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The problem Honda faces against the likes of Hyundai is that the Korean giant uses India as a manufacturing base for their small cars, hence their cars enjoy both very high localisation content and good volumes(domestic + exports), thus lower prices and more value to the customer.
Despite its success in the Indian car market for a decade Honda never considered India a manufacturing base but just an assembly operation. They did a lot of shouting regarding an India specific small car but other than an a mock up concept they had nothing else to show at the Auto Expo. Toyota and Nissan who announced small car projects much later have their cars almost production ready, while Honda is still sending saris to Japan to find out how Indian ladies sit in a car. Let me save them the trouble, its pretty similar to how Kimono clad Japanese women sit in their cars.
India has a lot of respect for the Honda brand, and the co. has made sure they juice this as well, high time they show some respect back. Heck, they even have an assembly operation in Pakistan despite selling less than half the Indian volumes. They need to make cars in India, not assemble them, price them sensibly and increase volumes through exports.
|4th March 2010, 18:45||#30|
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I think Honda failed to understand the hatchback segment in India. India is a unique market.
1) There is lot of fan following for certain brands and people are ready to pay a premium for the brand name.
This is evident from the Honda City, where Honda is charging a premium for the brand name. I'm not telling that the car is bad, but there is definitely a premium charged by Honda on the product.
2) The meaning of Hatchback in India is a whole lot different than the rest of the world.
In the thread, http://www.team-bhp.com/forum/indian...hback-10l.html (Would you buy a hatchback for 10L?) , 60% of the people voted against buying a hatchback for 10L. In India, you cannot sell a car, in it's hatchback version, even if it offers more space, features, and all the bells & whistles than a similarly priced sedan, if the price is beyond a point (~8L).
Honda got it wrong here. They went ahead and thought that they can charge the same premium what they charge on the City. But they failed to understand that the target buyers in the hatchback segment are more price conscious than brand savvy.
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