[avinash_m]

Originally Posted by honeybee

@avinash, it's a marketing ploy used by brands to ensure the brand value remains high. If Honda brought two City options to the table, the OHC and the NHC, the OHC would eat up into the NHC market share, as there would be many people who would buy the OHC for price reasons. By removing the OHC from the scene, Honda ensures you pay the same premium for a brand new City.

Same goes for selling vehicles cheap. Apart from the fiasco of the hybrid Civics, if Honda reduced prices of their cars just to sell more, they would never be able to hike them up. It's a premium you pay for the Honda brandname.

Honda, Toyota, Mercedes these are all brands which never want to come out with an 'affordable' tag. They are names associated with exclusivity or premium products. So although it would be a dream for Honda to see every Indian driving a Honda, they wouldn't want to actually sell to every Indian.

@honeybee: True, if we are talking about 'city' as the brand! Still, if that is the case, would you say the brand value of Fiesta would go down with Ford's latest move on the new Fiesta release (new and the classic). I'd think (Ford) Fiesta, as a brand, also enjoys a considerable premium (if not comparable to the city), is globally acknowledged, and would continue to sell well until FORD phases out the Classic.

This brings me to another thought, did HONDA not have confidence in the NHC when it replaced the OHC? Reason being, (taking Ford's example again) the new fiesta already looks better in every aspect than the Classic, justifying the premium it'd enjoy over the Classic and Ford seems confident to sell both side-by-side.

If HONDA had thought of maintaining this exclusivity by not being affordable (always), then why the BRIO? If volumes is not what HONDA is concerned about (now) then why have such a car in their India line-up at all.

[DKG]

April Auto Sales: Honda
American Honda Motor Co. said Tuesday its U.S. sales rose 9.8 percent in April from the same month last year on stronger sales of its fuel-efficient vehicles.
BY THE NUMBERS: The Japanese automaker sold 124,799 vehicles in April, up from 113,697 a year ago.
THE DIVISIONS: Acura, the automaker’s luxury vehicle division, sold 11,604 units in April. That’s up 8 percent from the same time a year ago.
TOP SELLERS: Honda sold 30,310 Accord sedans and 26,777 Civics in April.
HOT MODELS: Sales of the Fit subcompact car surged 73 percent compared with a year earlier, while sales of the CR-V crossover vehicle rose 30 percent.

Source
This is info available off the net ! And in India Honda is struggling.

The US is the world most significant market and a mature one at that and India is a fast growing market and a baby when it comes to maturity. So what strategy works where? Is India worth worrying about when the total sales nation wide are less than the Acura division? Will Honda bosses fret and fume and order a world car based on Indian customer preferences?

I doubt it.

Honda's immediate strategy for India should at best be to release a sedan based on the Brio and price it under 10 lacs. If I am the boss at Honda I will try to bring a mini hybrid at under 10 lacs, perhaps a Brio hybrid That is the way ahead for Honda in India. Not slotting another mfg's diesel into its cars just so it retains a slipping chart slot.

Honda's strength is in being one of the finest engineered cars in the world, cars with the highest emission standards and with the least impact on the environment in terms of dependence on new fresh resources. The extent to which this car is recyclable is amazing.

Does the average Indian buyer even think about the environment when he selects a car? Someone told me when you travel to New Zealand and leave the country they give you info on the carbon footprint you left behind. I was wondering how Indians spell "carbon footprint" everytime I am behind one of the auto rickshaws and buses and trucks plying our roads. We should coin the term "carbon tsunami" and consign a company like Honda to the back bench for good !

Get hybrids Honda Siel and show this country the way forward. Show the lawmakers how to run their legislation on environmental preservation by showing them a product that will blow their socks off. Show the Indian consumer what a global citizen should be bothered about.

Honda has always been a technology driven company. Run by engineers who create technology that sets the standard. The day they listen to marketing guys you won't know the Honda rear end from a Hyundai.

[vinya_jag]

I remember reading this in Auto-India mag way back when Honda brought their 1.3 and 1.5 engines with 75 and 90 bhp respectively. (Dont thrash me if I have got the numbers wrong)
It said "Honda does not build cars, they build engines and build cars around them"

Then, the OHC was plain looking compared to the Ford Escort and the Opel Astra. Yet, this car was the most impressive because of the power rating and mileage which no one could match. They were the pioneers of petrol engines those days.

I also remember Villeneuve 1997 World Champion say: What if I leave Honda and they start winning races. (Honda was new into F1 and BAR had Villenueve as their No 1 driver, and the team was not doing very well. But everyone would say that Honda had the highest revving engine at that time, read most powerful. They were the first ones to produce 19K RPM engines if I am not wrong)


The NHC was again the first for its engine development. A 2 valve per cylinder 1.4 engine which produced little power but was extremely fuel efficient.

So what happened when it launched the ANHC? No technical brilliance, enhanced looks and interiors (Very unlike Honda). They were already playing catch up as their NHC was not very powerful. They brought a mundane engine which runs even to this day, and is matched if not beaten by most of its competitors.

I feel, for Honda to trounce, it needs the cutting edge engine technology. They cannot beat competition with marketing gimicks or VFM cars.

Come on Honda, you can do better !!

[honeybee]

Originally Posted by DKG

April Auto Sales: Honda

The US is the world most significant market and a mature one at that and India is a fast growing market and a baby when it comes to maturity. So what strategy works where? Is India worth worrying about when the total sales nation wide are less than the Acura division? Will Honda bosses fret and fume and order a world car based on Indian customer preferences?

I doubt it.

I think they will have to, at some point of time. The US cannot keep up the sales for long. It's going to be the emerging markets which will drive the world economies. And it's not just about numbers. At one time (or even today) anything Western is considered to be fashionable here. There might well be a time when anything Indian is considered fashionable. And when Indians prefer Hyundais and Marutis over Hondas, it would dent their global reputation. So I think it's only a matter of time before they wake up to the need to cater to the Indian market.

@avinash, I was implying that being Honda they would prefer to maintain their premiums instead of catering to the mass markets. In contrast to Maruti who will always play by the volumes. When Hyundai launched i10, there was talk they would withdraw Santro. But they didn't, seeing as Santro is still going strong. However this is more to do with the company's vision. Each company may have its own vision which will largely decide such matters during the strategy planning.

[aaggoswami]

Originally Posted by GTO

Strengths

1) Brand Honda has a huge following in India. Just like one can't go wrong with a Maruti for 5 lakhs, the perception is the same for the 9 lakh rupee Honda City. A fuss-free ownership experience is guaranteed.
2) All-rounded products. Honda's are usually fast & fun to drive, supremely reliable and require little maintenance.

Weaknesses

3) NO DIESEL! Petrol is priced stratospherically high today, and even those cars owners with deep pockets feel the pinch on every full tank bill. I reiterate that Honda is the only manufacturer without a diesel engine in its lineup, and that is the biggest disadvantage today. Honda has merely 1 diesel engine worldwide. That's the outcome of being overtly dependent on the USA market, I guess.

Honda was once a technological tour de force. The first to bring variable valve tech, excellent automatic transmissions and more with the original Honda City. But where is the technological innovation today? Where are the direct-injection petrols, dual-clutch transmissions and turbocharged small capacity petrol motors that your competitors have already introduced in the market?

Opportunities

4) Jazz : This girl's never going to move at the current pricing, Honda. Swallow a bitter bill, cut the price by 1.0 lakh and watch her fly out of showrooms. No one has a problem with the product; each ownership review speaks highly of the car's quality & capability. Unfortunate that a nearly flawless product is made to fail due to flawed business strategy.

5) Diesels. When Maruti - a onetime strong opponent to diesel cars - can say "If you can't beat 'em, join 'em" and tied up with Fiat for diesels, why can't Honda outsource oil burners? Plus, the Civic & Accord can make use of Honda's own 2.2L CTDi diesel that it sells in the UK..

• Dual fuel variants. There's no better time to introduce factory-installed, precision-engineered, CNG & LPG variants. Build them and then, market them hard.

Threats

6) Volkswagen & Hyundai, both make for exceedingly formidable competition. When I drove the Vento, I commented that this is the first sedan capable of going against the Honda City. And I was right. VW has the brand power to compete with Honda, mega financial muscle and diesel engines. Hyundai has already overtaken Honda at the global level. Quite honestly, there is no difference in overall quality & reliability between Honda & Hyundai now. Hyundai's cars also have a premium attached to them, but they have diesels and are far better equipped.

1) That following has taken a hit IMO. Else things wont go this wrong specially the City.

2) I beg to differ. Jazz is not exactly fun to drive. Neither is City, yes city is quite good, but not fun to drive. The only car I would say in Honda's current range which is fun to drive is Civic.


3) I would add different words. They were too focused on a) North American Market and b) Petrols.

About technological innovations, well Honda itself once admittted that its a mistake that they ignored turbocharged small petrols. Honda cited this and lack of diesel as main reason why others managed better in Europe, including Nissan.

4) Are you sure that even after Rs. 1 lakh cut Jazz will fly ? i20 is there with diesel, VW is also there with diesel and below that we have Swift and new Swift is not that far.

5) Honda must source diesel from others, mainly from europe. But from whom ? All of them want to enter India which is a good diesel market. Why would anyone give them diesel tech ?
Fiat clearly stated that they will not give Multiair to anybody as now they are not in cash crunch. For whatsoever reason, link with GM or anything, Suzuki would not have got license to produce the Fiat engine if Fiat was in a very sound financial condition at that time.
Now, nobody would like to sell diesel tech.
The only resort is to invest in its own R&D with external agency help and this could be a positive long term step.
Immediate action should be coming up with diesel CRV and Accord.

One resort is Mitsubishi. Mitsubishi is not in good health. They recently came up with diesel engines of their own which are good. Buy tech from them and sell cars with those two diesel engines. Life will be good for Honda and Mitsubishi (also known for good engineering ) motors will find reputation just has Fiat has got through Maruti. Honda can replicate the Maruti + Fiat engine saga on international level.

6) Hyundai. This is one damn lucky manufacturer. They advertised Getz as car of the year Europe 2006 in India. They got away with it. All its design earlier and even now are shameless copy. They have built themselves on copy. This is one manufacturer I dont respect. Neither are the newer products that better. The new Verna is not that good a handler I suppose. They are surviving on a) copycats and b) diesel. This is purley IMO.
Honda cars atleast have originality. Hyundai cars lack that too.

They invested in diesel engines R&D at right time. Something even Toyota missed.

[avisidhu]

Originally Posted by vinya_jag

So what happened when it launched the ANHC? No technical brilliance, enhanced looks and interiors (Very unlike Honda). They were already playing catch up as their NHC was not very powerful. They brought a mundane engine which runs even to this day, and is matched if not beaten by most of its competitors.

Pray explaining which vehicle within the same price bracket actually does that?
Being overpriced and lacking essential features are justified arguments, but let's not go overboard please. The ANHC still ends up clicking the most check boxes, when it comes to a petrol vehicle within 10L.

[GTO]

Originally Posted by DKG

[American Honda Motor Co. said Tuesday its U.S. sales rose 9.8 percent in April from the same month last year on stronger sales of its fuel-efficient vehicles.

Of course they'll say that. What American Honda Motor Co. does NOT say is:

- Honda's American marketshare dropped to 10.8 % in April 2011, compared to 11.6 in April 2010. That's nearly a full point in their biggest market. Plus, it indicates that the industry grew faster than Honda.

- April 2010 was a recessionary period for the US auto industry. And mostly everyone has gained M-O-M

BTW, Nissan overtook Honda for the first time in decades Linky

Will Honda bosses fret and fume and order a world car based on Indian customer preferences?

That's why they have a management based in India. The Noida management is responsible for Indian operations, and this thread focuses on Honda India, because that's what's relevant to us.

I'm sure there is a reason that other car manufacturers fret & fume over India. After all, our growth rates are fast and depending on which analyst you listen to, India will be a 5 million vehicle a year market (1/2 of America last year BTW) and the 4th largest in the world in a decade (apparently a 10 million car a year market). If Honda treats its Indian operations carelessly, well they will be missing the bus. Just like many did in China.

Honda's immediate strategy for India should at best be to release a sedan based on the Brio and price it under 10 lacs.

The City is their sub-10 lakh sedan. Are you suggesting a slot below the City?

Not slotting another mfg's diesel into its cars just so it retains a slipping chart slot.

It's all about adaptability, DKG. Maruti did just that and see the effect! I can assure you it's hugely profitable too. BTW, Honda has used diesel engines from other car makers in European markets.

Honda's strength is in being one of the finest engineered cars in the world, cars with the highest emission standards and with the least impact on the environment in terms of dependence on new fresh resources. The extent to which this car is recyclable is amazing.

Sure, but that doesn't mean Toyota is far behind. And Toyota India seems to be doing a damned good job with their Indian growth story too. I don't think the Accord is substantially more "environment friendly" than a Camry.

Get hybrids Honda Siel and show this country the way forward.

Do the Jazz / Civic / Accord / CRV - in their current positioning - have the pricing room to accommodate a lakh rupees in premium, and still sell?

Honda has always been a technology driven company. Run by engineers who create technology that sets the standard.

That's why my point:

Honda was once a technological tour de force. The first to bring variable valve tech, excellent automatic transmissions and more with the original Honda City. But where is the technological innovation today? Where are the direct-injection petrols, dual-clutch transmissions and turbocharged small capacity petrol motors that your competitors have already introduced in the market?

I'd like to know where the cutting edge technology is, in their current lineup? There is nothing path-breaking or "technology that sets the standard" in their current lineup.

[ramharis]

Not sure how many have looked and sat inside Brio, but i have once and believe me its does not look promissing to put Honda back on the market.

Few drawbacks in Brio
1. Rear door is just Glass, so we have to be gentle in closing it (like the first gen Maruti 800). since the glass is small and rear bumper is large, loading your suitecase is not easy.

2. The front visibility is not even close to that of the rival, the dash board i way too high. Honda was conducting this survey for Brio and had i20, Polo and Swift for comparison. They drew 3 horizontal colored lines on a wall at about 5ft from the each car and asked me to tell me sit in the driver seat and tell them which bottom line was visible, in Brio i wasn't able to see even the top most line (iam 6.2).

3. The rear door is small so getting in and out was way too difficult for me (i would say swift was much better)

and a few more issues to add to it.

With that sort of a car Honda cannot and should not rely on getting back on its feet. I would suggest the best way is to release City and Civic with Diesel and price it according to the market standards

[spadix]

Originally Posted by cuboid

BTW, OHC retired on top its world. A smashed ANHC would have been more appropriate. :-)

And here you go.

Apologies for the shameless plug, but I would like to bring forth an interesting observation (based on a sample size of just 1 dealer) here. In the few weeks that I interacted with Pride Honda before, during and after my purchase of my Civic, I'd heard of 3 distinct instances of trailers carrying Honda cars turning turtle on their way to the respective dealers' stock yards. I don't know if it's a problem with Honda or Pride, or if it's even a problem at all.

Originally Posted by honeybee

If Honda brought two City options to the table, the OHC and the NHC, the OHC would eat up into the NHC market share, as there would be many people who would buy the OHC for price reasons.

And this is exactly what happened with the Civic 1.8E. They pulled it because it was cannibalizing the City V!

The Civic in V form itself is very poor on features. The E was even more crippled. Yet (if they are speaking the truth) it managed to outsell the City V in the few months both were on the market together. That says something.

Really, the easiest thing for Honda to do is load the cars with features. Just look at the Civic's manual and one will weep at the complete lack of useful features on the Indian Civic (for instance: no folding rear seat - leave alone a 60:40 split, no intermittent speed setting on the wipers). They brought out the Civic with a sunroof, but by adding nearly 60k to the price.

I think they have the right ideas/intentions but the devil is in the details of the execution of these plans, and that's where they're losing the plot.

Anyway, before closing this thread out, I would just like someone from Honda India to tell us just what their goals/ambitions are in this market.

Regards,
spadix

[karanraheja]

Originally Posted by GTO

The City is their sub-10 lakh sedan. Are you suggesting a slot below the City?

Frankly that would'nt be a bad idea. But obviously it all depends on how they price Brio to see if there is scope for a Brio Sedan.

Originally Posted by GTO

Whoever signed off on the Jazz' final price was obviously out of tune with market conditions.

I remember that when i20 price was announced i had mentioned that Jazz would kill i20 without a doubt. But market proved me wrongly and the market was right. Honda has to pull a Skoda here and reposition the Jazz like Skoda did it to its Fabia.

Originally Posted by GTO

Hyundai's cars also have a premium attached to them, but they have diesels and are far better equipped.

Present Gen of Hyundai cars are not what we can call a sheer VFM but with the amount of equipment and refined CRDI engines they are offering they are surely ticking the right boxes for most of the Indian consumer.

Originally Posted by rutvij

I guess 2nd Generation Honda City and 1G(In India) Honda Accord and CRV were priced competitively. But they goofed up on pricing front on subsequent launches of 3G Honda City, and 2G Honda Accord and CRV.

I think they goofed up with pricing of NHC itself. It was neither loaded nor FTD. The practicality , FE made the car sell like hot cakes.

[drmohitg]

Even Honda's new small car Brio is rumored to be priced around 5-6Lacs which means it will be around 7 lacs OTR atleast. How many people will go for a petrol hatchback at that price point? And knowing Honda they will surely not provide much equipment levels in the car compared to the competition.

[blackasta]

Originally Posted by aaggoswami

6) Hyundai. This is one damn lucky manufacturer. They advertised Getz as car of the year Europe 2006 in India. They got away with it. All its design earlier and even now are shameless copy. They have built themselves on copy. This is one manufacturer I dont respect. Neither are the newer products that better. The new Verna is not that good a handler I suppose. They are surviving on a) copycats and b) diesel. This is purley IMO.
Honda cars atleast have originality. Hyundai cars lack that too.

They invested in diesel engines R&D at right time. Something even Toyota missed.

Wow you are pretty agitated ! Agreed that older hyundais were copies, but come on give them some credit for the nice designs they are bringing on currently.

Also - hyundai packs segment first equipments for each new car they are launching (i10 - AT / heated mirror, i20 - satnav / 6 airbags, verna - IRVM integrated cam/ 6 airbags), and you yourself agree their diesels are selling - which is the need of the hour.

The only way for Honda to get volumes is to launch brio with equipments packed to the grill (would have advocated a diesel but its too late I presume) and price it on the range of 4.5 - 5.5 Lakhs.

Also - relaunch the jazz with competitive equipments and price at par with i20. A price overlap with brio is ok - as in i10 and i20.

Or else they shall be reduced to another speck of dust like mitsu is now.

[shortbread]

Before Honda launches the Brio they need to look around at rivals and understand their models, features, price etc.... I know this goes without saying when developng a new car but one gets the feeing that Honda is kind of disconnected with the real market. Another issue is in an atempt to price it competitively I hope the Brio will not have an 'acceptable by third world feel' a la Logan.

[vb-saan]

Great thread GTO, and well-timed. Thank you!
And I read through that line a couple of times - the way they managed CR-V pricing. Shocking!

Now, thinking around - is this a problem with Honda India alone. From what I have read around, they are not doing very well worldwide, and find it pretty hard to keep up with the competition in every other market.

Could this be because they're struggling financially as a company? If you look at it, they have not done anything special after the financial crisis, and the disbanding of their F1 team in end 2008. And offlate, I don't see any fresh or exciting product from their stable. The last one was maybe the Civic.

I will say, this is one Japanese manufacturer whose good health is vital for the auto industry.

[mdsaab]

what is Honda known for?
Their free revving super smooth silky VTEC engines.
What else?
The quality of materials used are of good quality.
how about looks?
Known for their quirky and futuristic looking designs, Honda's do look stunning.

All seems well..... but wait that's not quite enough.

What is lacking?
Features?
You bet! Honda's almost always have some feature or the other missing. We need future Honda's to be loaded with atleast segment par features if not better.
Diesel engines?
Indians are obsessed with them, if you don't have a diesel variant in your lineup you can cut your sales estimates by about 40%. So Honda needs to work hard and fast at introducing diesel engines in India.

Fixing these issues if Honda continues to still command a slight premium in prices over the competition i don't see too many people complaining. the H has always been a much sought after brand in India. and fixing these issues i am sure the brand will continue to be on the top of future buyers lists.

Rev Hard Honda - Rev Diesel