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Old 3rd February 2011, 23:18   #31
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by supremeBaleno View Post

When you compare the K with Altis, it is "just a few extra features". But when K is compared with the Superb, the latter is "loaded". Funny.

And while we never fail to cry hoarse about companies scrimping on safety features, but when we have 6 Airbags in the K, it is just a few extra features. Since the Hondas and Toyotas are lagging here, it becomes a useless feature.
At supremebaleno:
In my post, I am referring to a regular consumer. I did mention that only a handful of enthusiasts would go for the Kizashi, but even then, for the enthusiast the Superb, at Rs. 2L more) makes more sense as it comes with (taken from Skoda website and brochure):
- 8 airbags
- cornering lamps
- TPM
- Hill Hold feature

Along with possibly better highway manners (have not driven the Kizashi so cannot say anything) and a very capable engine.

Even for the average consumer the Superb makes more sense in terms of features as it has:
- Nappa Leather
- Much more space + better brand value
- Sunroof
- electric driver and passenger seat
- Umbrellas

And in comparison to the Altis, would a regular consumer pay 4L more for a more powerful engine and 4 extra airbags?
Is the engine worth 3L more? Hyundai was able to price the i20 Asta O with a sunroof and 6 airbags at less than a Rs 1L premium (IIRC it should be around 60K) over its 2 airbag version.
If that is the case, is Maruti justified in asking over Rs. 3L for the additional power?

So, it really comes down to how you look at things. I for one find it poor VFM. You may feel otherwise.

Last edited by lamborghini : 3rd February 2011 at 23:25.
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Old 4th February 2011, 09:55   #32
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

This thread is not in the right spirit.
Let us talk about the respective cars and what they offer and not harp on this "brand image".

  • If Tata launches an Aria with best-in-class features, it still has to be priced at par with Innova, which can't hold a candle to the Aria?
  • If Maruti launches Kizashi with great specs and features, we expect the price of a Civic though it is more in the league of an Accord! Not fair!
  • If Volkswagen launches a Polo with an archaic 3-pot motor and worst-in-class features and then prices it higher than the I20 or Punto (after discounts), still it is considered VFM! Again, not fair!
High time to get rid of these prejudices. TBHP should lead the way

Last edited by adimicra : 4th February 2011 at 09:56.
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Old 4th February 2011, 10:04   #33
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Can we really say that premium brands are going down the VFM road? My opinion is that they are trying to price their cars close to their prices in other countries. However, what are we getting/losing with these so called VFM luxury vehicles? Loads of features that you would get for a similar price in other countries!
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Old 4th February 2011, 10:13   #34
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

I find it hard to put Toyota in premium segment. It does have cars such as Corolla and Camry, which can be branded as premium, at least in the Indian market. But it also has vehicles such as Qualis in its stable, which I believe is anything but premium. Even Innova is more on the utilitarian side - I don't consider it premium.

I'm not an automobile expert and admit my knowledge on this is primitive - Just wanted to provide my 2 cents; I could be wrong here.
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Old 4th February 2011, 12:10   #35
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Great discussion, guys. Some very insightful perspectives.

Quote:
Originally Posted by vb-san View Post
Toyota & Nissan: I will not consider these as premium brands, bringing VFM options.
Quote:
Originally Posted by sith_lord View Post
I find it hard to put Toyota in premium segment.
I don't mean Toyota being premium in the "BMW" sense. However, their products do successfully command a premium price over Suzuki / Hyundai / Tata / Mahindra (as they do in the rest of the world too).

Quote:
Originally Posted by psbali View Post
In big cities but my Aria Pride model was 16.6 lacs on road as it was registered out of octroi and on top of that I saved another 40k by getting the insurance and registration done by myself. So atleast for me it is not expensive but rather VFM. At times you can also blame the high prices on local levies and not just on the manufacturers.

So does Aria Pride even at 16.6 lacs on road seem to be overpriced?
Even its direct competitors would be proportionately cheaper by saving on octroi / insurance, wouldn't they? It's not an Aria-specific pricing advantage.

Quote:
Originally Posted by radiokidb View Post
You are comparing the base Altis which does not have any features and the top specced Kizashi.
Features alone don't make a car. The Altis is the current C+ segment leader and hence, I used it as a base for comparison. The top-loaded Altis is still cheaper by 3+ lakhs than the Kizashi. And believe me, the Altis has all the features that most buyers want. It also has a wonderful track record.

Quote:
Originally Posted by shankar.balan View Post
But one would generally feel like cribbing like the blazes if one is asked to pay big money for a Tata or a Maruti or a Mahindra World SUV despite these vehicles being super-loaded with features etc.
I don't think anyone would crib if Tata & Mahindra prove they have the quality, reliability & finesse that's expected in a premium product. For instance, the market has given the thumbs down to the Sonata. But, in my books, the Sonata common-rail is one of the best luxo-sedans you can buy for the price. I'd pick it over a Laura any which day.

Quote:
We are all overly familiar with these Indian marques but are not sufficiently motivated to pay big bucks for them.
The Indian marques are also known for inconsistent quality, reliability, after-sales and on-road manners. Tata & Mahindra have a long way to go before they can start charging premiums.

Quote:
Originally Posted by ACM View Post
When will Honda learn? (It is now reduced to a 1 model wonder in India)
That's a million dollar question ACM. Hopefully, the Jazz has provided them with a thorough education.

Quote:
Originally Posted by snorting bull View Post
Kizashi priced at around $20K in the US is priced in India at 16.5 L !! Surely companies have determined India to be a place for minting money.
Quote:
Originally Posted by designersf View Post
IMHO Maruti would be having the same margin (or slightly more) as their US model. Blame the high price to the import duties. Half the price goes to the Govt which embezzles them.
Well, though I insist the Kizashi is overpriced, Maruti did manage to place it slightly below the Accord (as in other markets). Consumer Reports - a publication I deeply trust & respect - has this to say here

Quote:
The Suzuki Kizashi is kind of a head scratcher. It's not a bad car, but it isn't likely to turn the family-sedan segment on its ear, either.
Quote:
The problem is, the family sedan market is already full of a number of really good contenders, whose names and reputations are better known to the families buying them. And while the Kizashi is big for a Suzuki, it's smaller than what competitors offer in the same price range.
Quote:
And families are usually more concerned with interior room and bottom line than auto up/down windows. Call it what you will, the small sedan or family sedan market is a tough one to break into. As I transition into our $21,800 Hyundai Sonata, it is clear that Kizashi has its work cut out for it.
Equally, the Kizashi is already considered a flop in North American (the market it was designed for), selling an average of 400+ units in a month. It's direct competitor - the Accord - does over 25,000.

Quote:
Originally Posted by ajay0612 View Post
It is those few people whose rationality forces manufacturers to provide more 'real value' than superficial one (i.e. brand premium).
Sorry to say, it's not those "few people". Toyota & Honda have several sales toppers the world over. And atleast one of them has made it to the world's No.1 in volume. There is nothing "superficial" about the "rationality" why Toyota & Honda find buyers amongst us. We pay for well-rounded products that guarantee hassle-free ownership.

The premium their products command isn't based on advertisements; it is on real world experiences where their vehicles have proved stupendously durable & reliable. Whichever resource you use for brand reliability & durability, you'll see Toyota or Honda in the top list.

Quote:
Well. Such an accusation needs to be supported by data. The charge dismisses the whole system of product testing, homologation and approval process. I don't think so many people buying Tata vehicles can remain guinea pig for such a long time.
Tata's vehicles do have reliability issues and that's a well-documented fact across several resources. As an owner of an '07 Indigo, I can attest to the same too. The number of niggles & problems are terribly annoying. I'm not one to sell my car before they complete 8 - 10 years....however, I am considering replacing the Indigo with a real workhorse this year. I don't remember the last time I sold a car within 4 years.

Quote:
For them, there is long winding line at the counter of Fortuner.
No longer. Fortuners have already started becoming available within a month or two of booking in many metros (check Fortuner test thread). The backlog should be cleared. Expect the same across the board soon.
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Old 4th February 2011, 12:19   #36
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

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Originally Posted by GTO View Post
Seriously, what on earth is happening here?

BMW prices the X1 at a completely, unexpected, 22 lakh rupees. You will agree that it's a great price for a SUV-ish vehicle from one of the world's most revered automotive marques.
I could not agree with you more on this. I was and still remained shocked at how they could achieve that price! One word for it; Brilliant! What a lovely vehicle; not too large, just right in size with all the BMW goodies. If they have the BMW secure maintenance plan available for this, makes it really worth it.
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Old 4th February 2011, 12:34   #37
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by supremeBaleno View Post
When you compare the K with Altis, it is "just a few extra features". But when K is compared with the Superb, the latter is "loaded". Funny.

And while we never fail to cry hoarse about companies scrimping on safety features, but when we have 6 Airbags in the K, it is just a few extra features. Since the Hondas and Toyotas are lagging here, it becomes a useless feature.
Quote:
Originally Posted by adimicra View Post
This thread is not in the right spirit.
Let us talk about the respective cars and what they offer and not harp on this "brand image".
  • If Tata launches an Aria with best-in-class features, it still has to be priced at par with Innova, which can't hold a candle to the Aria?
  • If Maruti launches Kizashi with great specs and features, we expect the price of a Civic though it is more in the league of an Accord! Not fair!
  • If Volkswagen launches a Polo with an archaic 3-pot motor and worst-in-class features and then prices it higher than the I20 or Punto (after discounts), still it is considered VFM! Again, not fair!
Interesting points there supremeBaleno and adimicra .

Looks like people want VFM brands i.e. Tata & Maruti to launch products with features/Specs. a segment or two higher then competitors product and still price it a segment of two lower!!

That's not fair IMO.

Last edited by HammerHead : 4th February 2011 at 12:43.
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Old 4th February 2011, 12:44   #38
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

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Originally Posted by adimicra View Post
If Volkswagen launches a Polo with an archaic 3-pot motor and worst-in-class features...High time to get rid of these prejudices. TBHP should lead the way..
The so called archaic 3 cylinder was specially developed for better fuel efficiency. The 3 cylinder TDI finds its way in the Blue Motion which is one of the lowest emission vehicles in Europe. Cars can be built:

1. To a price
2. To perform
3. To give fuel efficiency.

Each of us have different needs.

I think labelling a very recently developed 3 cylinder engine that targets fuel economy is a prejudice in itself!
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Old 4th February 2011, 12:46   #39
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

What a wonderfull thread GTO! You have got things spot on.

Budget brands like Maruti, Hyundai, Tata cannot enter upper end of the car market as easiliy as premium brands like BMW, Audi, Merc can enter budget end of the market. If BMW launches a 5-6 lakh hatch, it will NEARLY wipe out all hatches from Maruti, Hyundai, Tata. However, if Maruti makes a 60 lakh sedan and expects it to wipe out BMW, it will be height of wild dreams.

So, it is these premium brands which can call shots-- in upper end as well as at lower end ( if they decide to enter this segment, that is ). So, Maruti, Tata, Hyundai better focus on VFM cars rather than venture into upper ends. Anyway, one good fallout of all this is, customer will be the king and will be benfited. So, some day, may be some day, Maruti will be threatened to a point where we will see Swift D with auto transmission, ABS, airbags, climate control, rear wash/wipe/defrost. I would love to see that happen. If BMW SUV can come for 22 lakhs then why not. Meanwhile, we can rename this thread as " Germans are coming".
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Old 4th February 2011, 13:44   #40
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by snorting bull View Post
Kizashi priced at around $20K in the US is priced in India at 16.5 L !! Surely companies have determined India to be a place for minting money.
Blame it on our Government's glorious tax policy! What a God forbidden country we live in!
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Old 4th February 2011, 13:51   #41
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by NevGin View Post
The so called archaic 3 cylinder was specially developed for better fuel efficiency. The 3 cylinder TDI finds its way in the Blue Motion which is one of the lowest emission vehicles in Europe. Cars can be built:

1. To a price
2. To perform
3. To give fuel efficiency.

Each of us have different needs.

I think labelling a very recently developed 3 cylinder engine that targets fuel economy is a prejudice in itself!
No need to take it personally please (because you own a Polo)!
I have seen hundreds of replies in TBHP regarding how ridiculously overpriced the Jazz is but I don't bother much. Helps to kee your nerves cool

And you just commented about one particular example in my post. I have given several examples and this particular example needs to be taken in context with the others. First of all, I was talking about the petrol which is the same old 3-cylinder motor from the Fabia with some tweaks.
Anyways, everyone knows 3 cylinder engines are cheaper than 4-cylinder ones. Why does Maruti have the 3-cylinder in the Alto K10/Astar/WagonR but not the Swift/Ritz? The 3-cylinder K-series (K10) will give better FE than the 4-cylinder K12. Isn't it? Why didn't VW offer the 3 cylinders on the Vento?

I was giving a few examples to illustrate the point. Not that I have anything personal against VW.
I am rebutting the topic of the thread itself that brand itself is not the most important factor. We need to look at what each car for what it offers.

Last edited by adimicra : 4th February 2011 at 13:55.
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Old 4th February 2011, 14:49   #42
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by GTO View Post
I don't think anyone would crib if Tata & Mahindra prove they have the quality, reliability & finesse that's expected in a premium product.
Quote:
Sorry to say, it's not those "few people".
Isn't Aria a product by which Tata wants to deliver 'quality, reliability & finesse that's expected in a premium product'?
On what count is it found wanting as compared to similarly priced (or slightly higher) competing products ? Of course we won't like them to launch a product for making losses (by artifically pricing the product lower than cost - unethical)

Those 'few people' have given Tata the encouragement to continue improving and delivering more. Else they would simply not consider making such product again. And that is what the competition wants - less competition from indegenous suppliers.

Quote:
The premium their products command isn't based on advertisements; it is on real world experiences where their vehicles have proved stupendously durable & reliable. Whichever resource you use for brand reliability & durability, you'll see Toyota or Honda in the top list.
When one is paying through the nose, he tends to take good care.
On the other hand cheaper Indicas & Indigos are abused a lot and lot of them run as taxis. (I am not denying that few cars might indeed have had issues from day one, like yours, but such niggling issues are being noticed in few cars of every manufacturer.)

Producing better workmenship does not cost so much to demand 3-4 lakh premium over similar indegenous product. e.g. Xylo Vs Innova. (Now don't kill me for putting these in same bracket . I did so based on simlar equipment level, power and functionality).
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Old 4th February 2011, 15:15   #43
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by GTO View Post
How is it that the same brands that get it perfectly well in a cost-competitive scenario, lose it all in the premium segment? Over-optimistic? Launching only for presence (and caring a damn about sales)? Volumes so poor, compared to their mainstream products, that they simply cant be bothered?
The scenario is rather self-explanatory than surprising.
Sticking to basics, the answer is competition and saturation which brings about the need to spread-out.

VFM brands are making their presence felt in premium/niche segments with the intention of laying a foundation for penetration in future, whereas premium ones are going the 'sachet', read hatchback/small-sedan way in order to cater to the masses.

I also see this as a process which shall break certain polarising perceptions, like an E-class being a taxi in the west and a premium saloon out here.
Looking at the gradual developments, I genuinely foresee the VFM and Premiums almost reaching an equilibrium in terms of brand value in certain segments.

The gap between badge and function is being bridged.

Speaking of optimism, it's the optimism of the empowered yet
easily-influenced masses that has brought about this situation.

Last edited by Jayabusa : 4th February 2011 at 15:26.
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Old 4th February 2011, 16:05   #44
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

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Originally Posted by adimicra View Post
No need to take it personally please (because you own a Polo)!
I have seen hundreds of replies in TBHP regarding how ridiculously overpriced the Jazz is but I don't bother much. Helps to kee your nerves cool

And you just commented about one particular example in my post. I have given several examples and this particular example needs to be taken in context with the others. First of all, I was talking about the petrol which is the same old 3-cylinder motor from the Fabia with some tweaks.
Anyways, everyone knows 3 cylinder engines are cheaper than 4-cylinder ones. Why does Maruti have the 3-cylinder in the Alto K10/Astar/WagonR but not the Swift/Ritz? The 3-cylinder K-series (K10) will give better FE than the 4-cylinder K12. Isn't it? Why didn't VW offer the 3 cylinders on the Vento?

I was giving a few examples to illustrate the point. Not that I have anything personal against VW.
I am rebutting the topic of the thread itself that brand itself is not the most important factor. We need to look at what each car for what it offers.
While I did respond to the remark, be rest assured I did not take it personally. I enjoy health banter.

Yes I know about digs being taken at the Jazz on its price as well and the fact that you have one. And which is why I said, everyone has something different to appreciate in their ideal car.

Back to the point now: Here is an example for you. We have an A Star at home which returns terrible mileage. So yes, there are 3 cylinder cars that give less than satisfactory mileage. As good engineering would have it, VW is not one of them. I beleve both the petrol and diesel churn out good figures.

Why are certain brands more sought after? Almost all of them have years of R&D that has led them to manufacturere technologically superior cars with a high degree of reliability. In years to come, many of the newer manufacturers may reach that stage but right now there is a clear distinction between brands.
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Old 4th February 2011, 16:21   #45
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Default Re: Premium brands going down the value-for-money road, & VFM brands becoming overpri

Quote:
Originally Posted by NevGin View Post
While I did respond to the remark, be rest assured I did not take it personally. I enjoy health banter.

Yes I know about digs being taken at the Jazz on its price as well and the fact that you have one. And which is why I said, everyone has something different to appreciate in their ideal car.

Back to the point now: Here is an example for you. We have an A Star at home which returns terrible mileage. So yes, there are 3 cylinder cars that give less than satisfactory mileage. As good engineering would have it, VW is not one of them. I beleve both the petrol and diesel churn out good figures.

Why are certain brands more sought after? Almost all of them have years of R&D that has led them to manufacturere technologically superior cars with a high degree of reliability. In years to come, many of the newer manufacturers may reach that stage but right now there is a clear distinction between brands.

I thought as per ARAI, the K10 is one of the most efficient engines in the country. And 4 cylinders like Swift/Ritz/Jazz do provide equal or better mileage than Polo's 3 cylinder (petrol). I am taking ACI and TBHP ownership threads as the references here. So, I don't believe it is because of FE only that VW has provided 3 cylinders. I firmly believe it is due to the cost savings.
Anyways, coming back to your points. I agree mostly. Some brands have developed their brand image over the years by providing technological superiority, reliability etc. and they definitely deserve a premium. But how much is the question?
The so-called VFM brands are venturing into luxury segments. They are providing best-in-class features and specs and I don't feel cars like Kizashi or Aria don't exude the quality as per the segment they are competing in. And IMO, they are reasonably priced and considerably cheaper than the so-called 'premium' brands. So what are cribbing about?
Just because it is a Maruti Suzuki, is it fair to expect it to be priced along with Civic whereas it competes with Accord/Camry in international markets?

Last edited by adimicra : 4th February 2011 at 16:49.
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