Honda India slashes the City's price by Rs. 44,000 - 66,000! High Points:
- Related Discussion on Honda India (a SWOT analysis) : The Way Forward.
- Honda today announces a new price structure for the City. These prices will be effective from June 14, 2011.
- The benefit in on-road price will be even greater, as the road tax & insurance will be cheaper too (vis a vis older on-road pricing).
- Obviously, it's competitive pressures & the disadvantage of not having a diesel variant at play here. My take? BRILLIANT move. This is the first time in history that the Honda City has gone through a price cut. I have always insisted that the City is the most all-rounded petrol sedan one can buy in the C segment; the new prices will only expand its appeal. I strongly recommend Honda to cut the price of the Jazz as well. The market doesn't have any problem with the otherwise brilliant hatchback, except for its price. Repositioning is also required with the Civic (or perhaps, price the upcoming new gen Civic more competitively) and the Accord (better equipment + that 2.2L diesel!). Honda has no other choice if it wants to claw back marketshare.
- Interestingly, and defying trends, it's the base variant that has the fattest price cut. A strategy for volumes.
- In a way, Honda has just made official the discounts that its dealers were already offering. In the last quarter, discounts of upto 50K were not uncommon. Question is, will dealers offer a further discount on the new ex-showroom prices?
- Expect all future launches, especially the Brio, to be well-priced. Competition is a wonderful thing!
Here's a post why I think it's brilliant: Quote:
Originally Posted by GTO - Honda has been extremely stubborn about its pricing. If anything, the prices only go up with time (e.g. in the case of the Civic). This is the first time that Honda has cut prices of the City, and I'm sure there was a royal tug of war amongst the decision makers. Brilliant are those who pushed for a price cut within the Honda ranks, and finally got their way. If you know how Japanese companies work, it takes a helluva lot of guts to speak your opinion against traditional thinking.
- By repositioning the City at 50K less, they have effectively left some room for a future diesel variant too. Personally, I would have bought the City even at the older price, and do think that it was well worth the premium. However, and the fact is, that price never left room for a diesel variant. This move has created space for a diesel engine in the future.
- Brilliant because the reaction time was quick. Till just a quarter back, the Honda City was No.1 in its segment. Within 3 months of losing the lead, Honda corrected its pricing. Look around in the market and you'll see that reaction times are longer than 3 months, especially when doing something major that's never been done before (in this case, a pricecut on the City).
- Brilliant because once you swallow a bitter pill, the second and third are easier to gulp down. Wait & watch on the Jazz' repositioning, and that for the next generation Civic.
- Brilliant because they addressed the right problem. IMHO, the City is still the best petrol C segment sedan. In fact, if you look at petrol-only sales, it is still the best selling petrol sedan in the segment. Honda realised that diesel competition, and rising petrol prices, will hurt it badly. Thus, they went ahead and cut the price. On the other hand, look at Fiat. They have a problem on the left hand (image, interiors, after-sales, niggling problems etc. etc.) but get surgery done on the right hand (90 BHP Punto which is still slow, a T-Jet petrol Linea that will never sell etc.). Both of these variants have had ZERO effect on Fiats sales. |
Last edited by GTO : 15th June 2011 at 10:36.
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