[raul]

All the cribbing, all the debates about taxes and price variance in India and all the 10 page arguments about price strategy, premium and volumes and finally the only thing that works is competition.

This is clearly Vento at work and kudos to Volkswagen for showing how its done. Unlike Skoda there are here for volumes and are not messing around, no point building a 'premium' brand with low numbers just for the sake of it unless you really are premium.

Honda has never done this before in India but it was sorely needed. Marketeers have to be pragmatic, there is nothing desperate about it. This is business and one has to respond to the market. Look at Nokia. This is a good move.

All the manufacturers with Honda leading the way have been creeping up prices in the various segments by a lakh and more, finally we have better sense prevailing and hopefully a reversal of the trend. Hyundai, Tata, Toyota, Renault, Mahindra must pay heed for all their launches. Hopefully others will follow and we will see the necessary correction.

Jazz is an excellent car in every way but price, a similar price cut on Jazz will work wonders for volume and that's one car that deserves to succeed.

[pamiboy]

What will happen if the price of Diesel also increases significantly?

Will the petrol engined cars claw back their sales chart? Honda might look pretty happy then.

[bluevolt]

Calm down guys. I was reading an old thread - http://www.team-bhp.com/forum/indian-car-scene/46203-edit-now-launched-all-new-honda-city-indian-version-full-specs-features-8.html.

Now compare the price(Delhi) of ANHC when it was launched in Oct. 2008 and now i.e., June 2011.

OCT 2008 - > City 1.5 S MT : Rs. 820,000

JUNE 2011 - > City 1.5 S MT : Rs. 820,000

Even after the reduction the price is same as when it was launched (E variant was introduced in 2009). So I guess Honda has just slashed the price which they have hiked in couple of years.

PS - This is turning out to be a hot thread with over 8000 views and over 100 replies in matter of few hours.

[Vid6639]

Originally Posted by adimicra

I can't welcome this move. It is something they have done out of desperation. They are behind the curve and rather than taking the game to the next level , they are responding in the most obvious but childish manner. What they could have done is bring some of the latest technologu and features in the ANHC and other cars with very minimal price hike. It shows that they do not have a long term strategy or vision for India. Pretty disappointing!

I think it's called herd mentality. Give the buyer what they want and don't underestimate the Indian market.

It's time they found out brand loyalty and brand value are not enough.

[souravc]

Originally Posted by pamiboy

What will happen if the price of Diesel also increases significantly?

That's not gonna happen , check out the inflation figures and the food inflation and you would know why the govt cannot afford a spike in transportation costs- its not without any reason that diesel has not been de-regulated . So its wishful thinking that diesel prices would be de-regulated and it would spike up, there is enough and more compelling arguement on why it won't happen anytime soon.

Coming back to Honda City , diesel option on the car is unlikely for the next couple of years - Honda as a company is way behind on diesel tech. The only way they can overcome this handicap is through sourcing powerplants from others

[adimicra]

Something to consider -
ANHC was already having discounts in the order of 50K or so..
Jazz is having discounts in the order of 50-75K ...

After the official price cuts, are they going to still offer the discounts?
If not, then it is not a big deal IMO.

They have just made the unofficial thing 'official' and that is indeed good

Originally Posted by vid6639

I think it's called herd mentality. Give the buyer what they want and don't underestimate the Indian market.

It's time they found out brand loyalty and brand value are not enough.

Can you care to explain what is the relation between herd mentality and the post above?
Honda has done what they think is right.
I have an opinion of myself and I do not welcome this move. Is that an issue?

[souravc]

Originally Posted by adimicra

They have just made the unofficial thing 'official' and that is indeed good

Thats bad , at least their dealers were getting practice at giving discounts. They should have got the practice for a few months more

I still remember when the Honda sales guy at one of the Mumbai showrooms offered me a princely discount of 5K and rubber mats free on VMT in July 2010 as "that is the best thing I can do under company scheme sir" ! It was apparent that they needed practice in the art of giving discounts and offers , City had spoilt them

[vina]

Originally Posted by souravc

That's not gonna happen , check out the inflation figures and the food inflation and you would know why the govt cannot afford a spike in transportation costs- its not without any reason that diesel has not been de-regulated . So its wishful thinking that diesel prices would be de-regulated and it would spike up, there is enough and more compelling arguement on why it won't happen anytime soon.

Coming back to Honda City , diesel option on the car is unlikely for the next couple of years - Honda as a company is way behind on diesel tech. The only way they can overcome this handicap is through sourcing powerplants from others

First of all, diesel prices will increase. Subsidy will not go away completely but they will increase enough that petrol Vs diesel will once again be obvious only for heavy users.

Second, while Honda does have weakness in diesel, they are the largest engine producer in the world and do have at least one diesel of their own design. Making a new engine will be incremental but hardly impossible in any reasonable time frame.

And third - Suzuki doesn't have a diesel either, that didn't prevent them from launching diesel cars (using a Fiat engine), Why should it be a handicap for Honda?



the thing is launching diesel, adding features, interducing new vehicles etc. can not be done in a day - it takes time. Honda hasn't done any of these shows how serious they have been over past few years about Indian market.

Honda has suddenly come out with (what is potentially a very costly) price cut shows that the seriousness part is definitely changing now and some real Brilliant products and pricing are in store in next few years.

[StarrySky]

Originally Posted by karanraheja

Err I dont think Honda had offered much discount on ANHC . Heck they didnt even offer Discount on NHC just around ANHC launch . The *big discounts* you talking about might have been offered by respective dealers .

If the discount was 5-10K, I would've agreed that those are probably dealer discounts. But people are talking about discounts of 40-50K or even more. I don't think any dealer can afford to offer such discounts on every car purchased without support from the manufacturer. Besides, what difference does it make to a customer if the discount is offered by dealer or the manufacturer? As far as he is concerned, he was getting 50K off earlier, about the same now.

[blackasta]

Originally Posted by StarrySky

If the discount was 5-10K, I would've agreed that those are probably dealer discounts. But people are talking about discounts of 40-50K or even more. I don't think any dealer can afford to offer such discounts on every car purchased without support from the manufacturer. Besides, what difference does it make to a customer if the discount is offered by dealer or the manufacturer? As far as he is concerned, he was getting 50K off earlier, about the same now.

I guess it matters - The road tax etc are calculated on the ex showroom price before discount. Its a huge issue (came to know from tbhp) in Karnataka that cars costing above 10 lakhs has to pay more taxes.

[vina]

Originally Posted by bluevolt

Calm down guys. I was reading an old thread - http://www.team-bhp.com/forum/indian-car-scene/46203-edit-now-launched-all-new-honda-city-indian-version-full-specs-features-8.html.

Now compare the price(Delhi) of ANHC when it was launched in Oct. 2008 and now i.e., June 2011.

OCT 2008 - > City 1.5 S MT : Rs. 820,000

JUNE 2011 - > City 1.5 S MT : Rs. 820,000

Even after the reduction the price is same as when it was launched (E variant was introduced in 2009). So I guess Honda has just slashed the price which they have hiked in couple of years.

PS - This is turning out to be a hot thread with over 8000 views and over 100 replies in matter of few hours.

Only one problem - steel prices, rubber prices, oil prices (they impact plastic parts etc.) are all higher now than they were in 2008, not to talk of the value of currency which has gone down.

Based on your data itself, City is now way cheaper than it was in 2008

[Vid6639]

Originally Posted by adimicra

Can you care to explain what is the relation between herd mentality and the post above?
Honda has done what they think is right.
I have an opinion of myself and I do not welcome this move. Is that an issue?

Yeah sure I'll clarify. Honda is now following herd mentality like other manufacturers in pricing their cars where they should be rather than thinking they are worth a premium.

Other manufacturers give the buyers what they want i.e. good vfm cars. Honda gives us cars with lesser features and nothing special but charge a premium for the brand name.

ps: I have nothing against Honda. I was a prospective buyer of the Civic then the Accord and the CR-V. Unfortunately all were rejected as they did not tick the right boxes for me. I recently recommended a Jazz to my cousin who is extremely happy with the car. Ofcourse he got a 1L discount on the earlier Jazz when the Jazz X came out.

[souravc]

Originally Posted by vina

First of all, diesel prices will increase. Subsidy will not go away completely but they will increase enough that petrol Vs diesel will once again be obvious only for heavy users.

Facts Vs your opinion ..
- Inflation at over 9 per cent , food inflation at nearly 8.5 per cent
- Minimum Support Price of Grains hiked which would further put pressure on food inflation
- Petrol accounts for only 12% fuel consumption while diesel 40%
- To add more technicality to the discussion the weightage of diesel in the WPI is more than 4 times that of petrol - thats direct weightage

I guess the government is sufficiently worried about inflation since the RBI has been throttling funds through rate hikes even at the cost of growth so diesel price will continue to treated like a holy cow - any hike postponed till it become absolutely necessary.
So even if the price increases petrol hikes will always outpace diesel till global prices cool down

Originally Posted by vina

Second, while Honda does have weakness in diesel, they are the largest engine producer in the world and do have at least one diesel of their own design. Making a new engine will be incremental but hardly impossible in any reasonable time frame.

2 years by Honda's own admission

Originally Posted by vina

And third - Suzuki doesn't have a diesel either, that didn't prevent them from launching diesel cars (using a Fiat engine), Why should it be a handicap for Honda?

Yes they can source but from whom ? VW, Hyundai, GM can be ruled out - at least not for the City. Fiat is unlikely to sell to Honda , they have limited the number they supply to Suzuki too - lets not overlook the fact that Suzuki and Fiat both had significant GM holdings in each.

Originally Posted by vina

Honda has suddenly come out with (what is potentially a very costly) price cut shows that the seriousness part is definitely changing now and some real Brilliant products and pricing are in store in next few years.

I wouldn't say that a mere price cut in one product line promises brilliant products in store anyways , its more to maintain its relevance in the Indian market which is one of the fastest growing markets in the world . The coming months would tell whether Honda is as serious about the Indian car market as it is about the bikes market

[adimicra]

Originally Posted by vid6639

Yeah sure I'll clarify. Honda is now following herd mentality like other manufacturers in pricing their cars where they should be rather than thinking they are worth a premium.

Other manufacturers give the buyers what they want i.e. good vfm cars. Honda gives us cars with lesser features and nothing special but charge a premium for the brand name.

ps: I have nothing against Honda. I was a prospective buyer of the Civic then the Accord and the CR-V. Unfortunately all were rejected as they did not tick the right boxes for me. I recently recommended a Jazz to my cousin who is extremely happy with the car. Ofcourse he got a 1L discount on the earlier Jazz when the Jazz X came out.

Nice explanation but I got the drift
Anyways, I do not want to argue and start a war. You know best whether you feel you made the comment with the right intentions.
I too got the Jazz Select with a discount of 75K and some freebies. So even if they reduce the prices for Jazz officially, I do not have any issues.

Let me clarify - I never wanted Honda to sit idle. I wanted them to up the ante by bringing on better features and latest technology with a marginal/minimal increase in price. That is another way of countering the competition. What they have done is the easiest way - just cut the prices!
I would love to see Honda respond in a more constructive and strategic way rather than this knee-jerk reaction.

[Vid6639]

Originally Posted by adimicra

Let me clarify - I never wanted Honda to sit idle. I wanted them to up the ante by bringing on better features and latest technology with a marginal/minimal increase in price. That is another way of countering the competition. What they have done is the easiest way - just cut the prices!
I would love to see Honda respond in a more constructive and strategic way rather than this knee-jerk reaction.

If they increased the City's price marginally and added features where does that leave the Civic? Effectively the City would have gone a segment up outside the range of this segment. This segment is all about 10L sedans and anything higher means it's big risk.

I wouldn't really call this a knee-jerk reaction as Honda sales have been dwindling last few months and they were really beginning to lose steam.

Cheers!