Go Back   Team-BHP > BHP India > Team-BHP Reviews > Test-Drives & Initial Ownership Reports


Reply
 
Thread Tools Search this Thread
Old 3rd February 2011, 17:21   #841
Senior - BHPian
 
S_U_N's Avatar
 
Join Date: Mar 2010
Location: Pune
Posts: 1,781
Thanked: 380 Times
Default re: Review: 2nd-gen Honda Jazz

I have still not got a test drive (both dealers promise to come, but never show up).
I wonder if this is a genuine issue (e.g. test car gone for maintenance) or is it that there is no incentive to sell Jazz any more.

I don't agree that there are 100's of Jazz's lying in stock yard.
S_U_N is offline   Reply With Quote
Old 3rd February 2011, 23:00   #842
BHPian
 
Join Date: Oct 2010
Location: Bangalore
Posts: 44
Thanked: 26 Times
Default re: Review: 2nd-gen Honda Jazz

Quote:
Originally Posted by S_U_N View Post
I have still not got a test drive (both dealers promise to come, but never show up).
I wonder if this is a genuine issue (e.g. test car gone for maintenance) or is it that there is no incentive to sell Jazz any more.

I don't agree that there are 100's of Jazz's lying in stock yard.
Which city are you talking about? In Bangalore (after months of drooling over I20 and concluding its not the car for me) one friday at 11AM, I decided to test drive Jazz. Whitefield Honda(Kubera Reddy) was there with the car at my place by 2.30PM and I had booked the car later that night. It was as simple as that.

I base my conclusion on annual product of target - average monthly sales reported for the past 6 months. It admittedly un-corroborated calculation but calculation never the less. What are you basing your rebuttal on?
biyer is offline   Reply With Quote
Old 4th February 2011, 10:08   #843
BHPian
 
Join Date: Jul 2007
Location: Bangalore
Posts: 136
Thanked: 198 Times
Default re: Review: 2nd-gen Honda Jazz

Quote:
Originally Posted by biyer View Post
Thanks Devrishi for that info. This conclusively proves that production continued up until Nov 2010 for sure.
biyer,

My Dec-2010 purchased jazz is also Nov-2010 made.

cheers
lazy
lazy is offline   Reply With Quote
Old 4th February 2011, 13:22   #844
BHPian
 
Join Date: Oct 2010
Location: Bangalore
Posts: 44
Thanked: 26 Times
Default re: Review: 2nd-gen Honda Jazz

Quote:
Originally Posted by biyer View Post
To date, I think honda has made about 21,000 Honda Jazz(see narration below). I am trying to figure how much of that is unsold and the size of the problem Honda has in its hands. My GUESS is that Honda has about 15000 Jazz cars lying in their parking lots- manufactured & un-sold.

And now thats what, a 1000 crore(at Rs.7 lacs invoice value) problem? Considering the backlog, is it safe to assume now in Feb 2011, they would have COMPLETELY stopped production of Jazz until stocks are sold? It seems difficult to believe that if I want a 2011 model today, I cant get it. So I am guessing some sort of intelligent production plan for 2011 might be underway but what about all those unsold cars?

Any ideas how we can go about crunching these numbers from publically available sales figures with more authority? Can anyone point to sales figures for Jazz in one place:

1. 2nd half of 2009
2. Full year of 2010
3. Jan 2011


Narration for 21000 cars made so far:
--------------------------
Assuming production launch around July 2009, Honda Jazz has been in manufacture for about 19 months. I have seen figures ranging from either 1000 cars/month to 1666 cars/month ( from comments about 20k cars/year target). I am quite sure they would have ramped down the production or completely halted it for the last 6 of those 19 months. Lets assume an average of 1333 cars producded for the first 13 months and a 50% production of 666 cars for the last 6 months.
--------------------------
I have mined Honda's website for Jazz sales figures for the past 20 months(2009: 7 months; 2010: 12 months, 2011: 1 month).

Based on that analysis, I can conclude that Honda has officially sold a total of 11,857 Jazz cars for the past 20 months.

Assumption1: Previously I speculated that Honda has manufactured about 21000 Jazz cars. I stand by this but its speculation never the less. In fact I am confident that this figure can only turn out to be higher in truth -- in fact as high as double the current number -- and not lower due to assembly line economics. (Honda has previosuly stated that about 2000 cars/month production capacity has been established. To run the assembly lines at less than 2000 cars/month load would result in other losess)

Impact: Note that, the sales figures quoted above is Honda-Dealer sales. We dont know the off-take of dealers stock by customers. Assuming they have sold bulk of their 11,857 cars, that leaves about 9143 cars(21000 - 11857) manufactured and unsold by Honda.

Assumption2: If you want to speculate, I would add another 2500 cars on top of 9143 Honda stock, as unsold dealer stock. Thats a speculative total of about 11643 Jazz cars lying with dealer + honda stock yard.

Conclusion: There really aren't any, actually. Just some more guesess from my side. Never the less, here it is for what it is worth:

1. There are anywhere between 9143 to 11643 Honda Jazz cars lying unsold with dealer + honda, assuming a total production of 21000 cars so far.

2. This unsold figure can turn out to be three times higher(30643), if Honda in fact produced Jazz 40,000 cars instead of 21,000 as per their monthly target of 2000 cars/month up untill Jan 2011. But I discount this higher figure based on common sense that with an average monthly sales figure about 457 cars, it would be insane for any company to produce 40,000 cars in 20 months!

3. So I would stick by the range suggested earlier of 9143 to 11643 unsold cars as on date. Even with this lower figure, its unclear to me how Honda plans to liquidate these stocks with an average sales figure of 457 cars/month. I cant believe the dealers would now all of a sudden be willing to invoice 2000 Jazz cars/month. All things being equal(no price cuts, no dealer incentives etc.), at this rate, it would take another 25 months to liquidate the current level of stocks. Not being an automobile industry guy, I dont know how big this problem(stock build-up vs off-take) is and how commonly it occurs in the industry but it seems clear its a non-trivial problem with a price tag of about 640 to 815 crores of un-sold inventory with a cash-flow pipeline of 25 months. The interest cost alone to service that 850 crores investment would so huge that would rule out any further discounted sales.

Given the size of them problem is it then possible:

1. That Honda would dismantle the built Jazz cars to utilize the shared components into Honda city to recover costs faster?

2. Slash the prize of the Jazz drastically?

3. Export Jazz 1.2 from India?

4. Take the hit, absorb the inventory and bring in a 1.5Ivtec at the same cost for the all-new Jazz?
biyer is offline   Reply With Quote
Old 4th February 2011, 14:02   #845
Senior - BHPian
 
adimicra's Avatar
 
Join Date: Jul 2010
Location: Hyderabad
Posts: 1,558
Thanked: 1,058 Times
Default re: Review: 2nd-gen Honda Jazz

Quote:
Originally Posted by biyer View Post
I have mined Honda's website for Jazz sales figures for the past 20 months(2009: 7 months; 2010: 12 months, 2011: 1 month).

Based on that analysis, I can conclude that Honda has officially sold a total of 11,857 Jazz cars for the past 20 months.

Assumption1: Previously I speculated that Honda has manufactured about 21000 Jazz cars. I stand by this but its speculation never the less. In fact I am confident that this figure can only turn out to be higher in truth -- in fact as high as double the current number -- and not lower due to assembly line economics. (Honda has previosuly stated that about 2000 cars/month production capacity has been established. To run the assembly lines at less than 2000 cars/month load would result in other losess)

Impact: Note that, the sales figures quoted above is Honda-Dealer sales. We dont know the off-take of dealers stock by customers. Assuming they have sold bulk of their 11,857 cars, that leaves about 9143 cars(21000 - 11857) manufactured and unsold by Honda.

Assumption2: If you want to speculate, I would add another 2500 cars on top of 9143 Honda stock, as unsold dealer stock. Thats a speculative total of about 11643 Jazz cars lying with dealer + honda stock yard.

Conclusion: There really aren't any, actually. Just some more guesess from my side. Never the less, here it is for what it is worth:

1. There are anywhere between 9143 to 11643 Honda Jazz cars lying unsold with dealer + honda, assuming a total production of 21000 cars so far.

2. This unsold figure can turn out to be three times higher(30643), if Honda in fact produced Jazz 40,000 cars instead of 21,000 as per their monthly target of 2000 cars/month up untill Jan 2011. But I discount this higher figure based on common sense that with an average monthly sales figure about 457 cars, it would be insane for any company to produce 40,000 cars in 20 months!

3. So I would stick by the range suggested earlier of 9143 to 11643 unsold cars as on date. Even with this lower figure, its unclear to me how Honda plans to liquidate these stocks with an average sales figure of 457 cars/month. I cant believe the dealers would now all of a sudden be willing to invoice 2000 Jazz cars/month. All things being equal(no price cuts, no dealer incentives etc.), at this rate, it would take another 25 months to liquidate the current level of stocks. Not being an automobile industry guy, I dont know how big this problem(stock build-up vs off-take) is and how commonly it occurs in the industry but it seems clear its a non-trivial problem with a price tag of about 640 to 815 crores of un-sold inventory with a cash-flow pipeline of 25 months. The interest cost alone to service that 850 crores investment would so huge that would rule out any further discounted sales.

Given the size of them problem is it then possible:

1. That Honda would dismantle the built Jazz cars to utilize the shared components into Honda city to recover costs faster?

2. Slash the prize of the Jazz drastically?

3. Export Jazz 1.2 from India?

4. Take the hit, absorb the inventory and bring in a 1.5Ivtec at the same cost for the all-new Jazz?
Good speculation mate!
I don't see any desparation at the dealers to sell the Jazz, rather they are pushing the ANHC more!
Also, discounts have not been increased drastically. It is the same as 6 months back.
I think Honda has given up any hopes on the Jazz in India. That's little worrying because I own the car. But as long as the spares are available, I am fine as I am satisfied with my car.
Jazz is one of the most successful models for Honda worldwide and they can easily find some way to dispose any additional inventory.
I bough the Jazz in August and it had a manufacturing date of March 2010.
I think your production numbers are on the higher side. Honda I guess must have ramped down the production long back.
adimicra is online now   Reply With Quote
Old 4th February 2011, 14:44   #846
BHPian
 
Join Date: Oct 2010
Location: Bangalore
Posts: 44
Thanked: 26 Times
Default re: Review: 2nd-gen Honda Jazz

Quote:
Originally Posted by adimicra View Post
Good speculation mate!
I don't see any desparation at the dealers to sell the Jazz, rather they are pushing the ANHC more!
Also, discounts have not been increased drastically. It is the same as 6 months back.
I think Honda has given up any hopes on the Jazz in India. That's little worrying because I own the car. But as long as the spares are available, I am fine as I am satisfied with my car.
Jazz is one of the most successful models for Honda worldwide and they can easily find some way to dispose any additional inventory.
I bough the Jazz in August and it had a manufacturing date of March 2010.
I think your production numbers are on the higher side. Honda I guess must have ramped down the production long back.
Adi, according to me Honda has made peace with Jazz sales long while back. Now they only expect it to perform on-par with Civic sales -- as another niche car. Ofcourse this means loss and change of plans, because as per their original planning(production, supply chain, marketing etc.) they expected it to be a mass market prodct but never the less I would like to believe they now have a revised strategy. They better have!

Adi, if you study the sales numbers carefully:

Jun-09 2032; Jul-09 1037; Aug-09 1029; Sep-09 504; Oct-09 830; Nov-09 546; Dec-09 269; Jan-10 490 ; Feb-10 233 ;Mar-10 571; Apr-10 338; May-10 205; Jun-10 507; Jul-10 514; Aug-10 593; Sep-10 649; Oct-10 332 ; Nov-10 330; Dec-10 269 ;Jan-11 579;

...you would realise that the time frame to intervene and course-correct was Dec 2009 for Jazz to return 2000 cars/month target. Now they are too deep into this mode that I can only conclude they have absorbed the loss and devised a new long-term strategy for Honda car India in which Jazz is a niche 500 cars/month product. They may even have a long term plan of bumping it upto 750-1000 cars with a new engine, newer features and similar pricing in 2012 but no quick-fixes to the leaky bucket. I am unwilling to believe Honda hasn't encountered this situation before WW and doesnt have a play book when one of your supposedly stellar product under-performs in a newer market. So I wont say they have "given up hope" as a blanket statement on Jazz. What they have given up hope is in selling 2000 jazz cars/month. That much is evident. Why, isnt there life beyond mass-market? Isnt that what Brio is supposed to be? Companies make these type of adjustments all the time in other industries!

On spares and service, it would be doomsday for Honda if it abandons its loyal & premium customers. Personally I would bet against them fooling around with spares as it would affect their long term plan and reputation in India. I believe they are counting on it a lot. This is from their 2010 annual report:

"The formation of Honda Motor India for strengthening and integrating spare parts operations of Honda companies in India was an outcome of Takedagawa’s strong guidance, based on the belief that customer should be provided with swift delivery of spare parts for enhanced customer satisfaction"

As for my production numbers, they are quite solid Adi. My "21000 cars produced untill Jan 2011" figure is based on a progressively ramped down production model ( average of 1333 cars producded for the first 13 months and a 50% production of 666 cars for the last 6 months). It surely may have some variation but its unlikely to be huge. With a stated production capacity of 100,000 units/year in Noida(Rs.450 crores investment-- and recovered long time back) and additional 60,000 units/year in the new Tapukara facility(Rs.1000 crore investment-- none of which would be recovered as yet), Honda cannot afford to knock out an existing model from its assembly line! I dont think they can stop production of Jazz cars because there is a larger picture of a production capacity vs available models. If they pull out now or ramp down now, what will they fill it up with? There are costs associated with NOT running your plant. Their early plans for Jazz with localiztion of 78% would have involved volume commitments to suppliers and investors. For them to bring it to grinding halt may have implications which are far worse than building few 1000 jazz cars and NOT selling them. This is precisely the recession cycle that led to the collapse of GM in US. They produced cars because not producing them turned out more expensive!

Last edited by biyer : 4th February 2011 at 15:09. Reason: Tags removed.
biyer is offline   Reply With Quote
Old 4th February 2011, 17:15   #847
BHPian
 
Join Date: Oct 2010
Location: Bangalore
Posts: 44
Thanked: 26 Times
Default re: Review: 2nd-gen Honda Jazz

Can somebody confirm if this is a bonafide document? This document purports to be the Indian Jazz product and brand management presentation, presumably presented by senior Honda India senior executives. There are some really surprising claims in there. Not sure what to make of it.

I have to add a couple of links for you to see the documents. Please remove if inappropriate

http://docs.docstoc.com/orig/1051572...77692fb87.pptx

New Honda Jazz Product And Brand Management Presentation Document Watch And Download 2011-12 - ExattoSoft.com

I cant believe they made this flippant remark in an official presentation:

" Rs. 6,98,000 (A few thousand rupees more is justified isn't it?)"!

Seems wierd!

And in the financial projections segment they mention:

"Honda is investing $ 50,00,000 on production of Honda jazz in India so to reduce its cost of production"

-- What is that? Only 5 Mill USD investment??

And theyr proceed to say the following:

" For the next model Honda will invest about double of its previous investment i.e. $ 95,00,000

-Honda expects to get the invested money in first 8 months and the next 6 months will be in profit money

-If invested money is not recovered in those 8 months Honda will reduce the price slightly to attract more customers

-To constantly increase the number of customers, prices of hybrid models will not be increased drastically

-Honda will reinvest the 65% profit money back in market"

Conclusions:


1. So presuming they have not broken even in first 8 months, there is no 14-month upgrade cycle in play.

2. They certainly have not price corrected as mentioned above inspite of 19 months of under-performance.

3. With around 11857 vehicles sold so far @ presumably Rs.7 lacs per unit, thats about Rs.829 crores or about 180 Million USD. At about 35% profit margin that would leave about 63 million USD on table.

4. Even with such poor sales of Jazz, Honda India has long back recovered its initial $5 Mill USD + presumably another $9.5 Mill USD long back.

5. Thus Honda jazz is making a killing for Honda India, despite its apparent poor sales.
biyer is offline   Reply With Quote
Old 4th February 2011, 18:49   #848
Senior - BHPian
 
mail4ajo's Avatar
 
Join Date: Mar 2006
Location: San Antonio, TX
Posts: 1,834
Thanked: 222 Times
Default re: Review: 2nd-gen Honda Jazz

I wish Jazz keeps selling less. I can maintain the exclusivity of my purchase and snob value of the Brand. While driving, I usually see only about 5-7 Jazz in week where as its like 25+ for i20. I like that....

Dont worry about spares. Jazz shares a majority of the components with the City. Moreover, there is a big market that is importing spares from Thailand for Honda and Toyota sometimes from the OE supplier itself.

I have some contacts in Pattaya who can get me spares if need arises. US also has many online suppliers. Since I import RC spares/cars in plenty, I know the import and clearing process.
mail4ajo is offline   Reply With Quote
Old 4th February 2011, 19:16   #849
Senior - BHPian
 
selfdrive's Avatar
 
Join Date: Apr 2010
Location: Pune
Posts: 2,700
Thanked: 2,119 Times
Default re: Review: 2nd-gen Honda Jazz

Quote:
Originally Posted by biyer View Post
1. So presuming they have not broken even in first 8 months, there is no 14-month upgrade cycle in play.
2. They certainly have not price corrected as mentioned above inspite of 19 months of under-performance.
4. Even with such poor sales of Jazz, Honda India has long back recovered its initial $5 Mill USD + presumably another $9.5 Mill USD long back.
5. Thus Honda jazz is making a killing for Honda India, despite its apparent poor sales.
I couldnt agree more with your conclusions, would also like to observe that:
- they ignored the 3rd most important factor: price
- a timely correction would have ensured more flying off the shelf, perhaps they wanted to maintain exclusivity?!
- considering 19 months have gone, where is the news on the hybrid?
- if there is a hybrid, will it be more expensive than the X?

of course, assuming this is an official presentation
selfdrive is offline   Reply With Quote
Old 5th February 2011, 08:41   #850
Senior - BHPian
 
devarshi84's Avatar
 
Join Date: Jun 2005
Location: Ahmedabad - Tor
Posts: 3,996
Thanked: 118 Times
Default re: Review: 2nd-gen Honda Jazz

They had AT version on the cards. It never came out.
devarshi84 is offline   Reply With Quote
Old 5th February 2011, 15:50   #851
Senior - BHPian
 
mail4ajo's Avatar
 
Join Date: Mar 2006
Location: San Antonio, TX
Posts: 1,834
Thanked: 222 Times
Default re: Review: 2nd-gen Honda Jazz

Has anyone installed the side step illumination? Is there any cutting of wires for installation? Is it really cool?
mail4ajo is offline   Reply With Quote
Old 7th February 2011, 12:19   #852
Senior - BHPian
 
S_U_N's Avatar
 
Join Date: Mar 2010
Location: Pune
Posts: 1,781
Thanked: 380 Times
Default re: Review: 2nd-gen Honda Jazz

Quote:
Originally Posted by biyer View Post
Which city are you talking about?

I base my conclusion on annual product of target - average monthly sales reported for the past 6 months. It admittedly un-corroborated calculation but calculation never the less. What are you basing your rebuttal on?
City: Pune.
I don't think that that the annual production target would be maintained once market received the product negatively - thanks to the high price.
So, these calculations are something that I find hard to digest.
Plus the fact that dealers in Pune don't even bother to clear off their Jazz inventories - if they have any in the first place.
S_U_N is offline   Reply With Quote
Old 7th February 2011, 13:12   #853
Senior - BHPian
 
selfdrive's Avatar
 
Join Date: Apr 2010
Location: Pune
Posts: 2,700
Thanked: 2,119 Times
Default re: Review: 2nd-gen Honda Jazz

I agree with S U N; I had requested for a brochure a few weeks ago and it never arrived. Will try for the test drive when I return, though I will go to the showroom, no use waiting for them to return my call. For some reason I have found that very few dealers in Pune respond for test drives. The only one that turned up was the SX4. Tata, Hyundai (surprisingly) and Ford did not even respond and once I visited their showroom dont stop calling to ask
selfdrive is offline   Reply With Quote
Old 7th February 2011, 23:35   #854
Senior - BHPian
 
9thsphinx's Avatar
 
Join Date: Oct 2008
Location: Ahmedabad
Posts: 1,042
Thanked: 441 Times
Default re: Review: 2nd-gen Honda Jazz

Quote:
Originally Posted by mail4ajo View Post
Has anyone installed the side step illumination? Is there any cutting of wires for installation? Is it really cool?
I opted for the Mode package with my Select which included the side step illuminated garnish for the front and non-illuminated in the back. Trust me, the blue light emitting from the words Jazz, IS COOL! Just so you know, the coolness factor only shows in the night - in the daylight its almost as if the lights are not working at all! I am not sure about the wiring and installation though, but your Honda dealer can help you out with that I guess.
9thsphinx is offline   Reply With Quote
Old 10th February 2011, 16:58   #855
BHPian
 
Join Date: Feb 2005
Location: new mumbai
Posts: 99
Thanked: 4 Times
Default re: Review: 2nd-gen Honda Jazz

There is a foul smell coming from my Jazz. This happens as soon as I switch on the blower and the smell disappears when I switch on the A/c.

Did other owners face the same and if yes what is the cause for the same? Also any suggestions to resolve the same?
scrooze is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
The 2015 Honda Jazz (3rd-gen) JayPrashanth The Indian Car Scene 1642 8th July 2015 14:03
Honda issues recall for faulty power window switch on 2nd-Gen City Achyuth Vaibhav The Indian Car Scene 13 3rd July 2013 09:46
Honda to raise car prices, and Jazz launch soon. EDIT : Jazz spotted testing on pg.14 GeekSrik The Indian Car Scene 463 9th March 2010 11:17
Honda/Toyota cars considered very boring by 2nd Gen NRI kids? pgsagar The International Automotive Scene 23 6th February 2010 21:11


All times are GMT +5.5. The time now is 19:37.

Copyright ©2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks