[mints21]

Irrespective of the date or month on which the Jazz will be launched, one thing that we all can be certain now is not only competitive but reasonable pricing from Honda. Honda has realised that pricing of a product will play a very crucial role if they have to regain their lost ground.

With aggressive pricing the city is surely going to give a tough run to Verna, sunny etc similarly jazz will shake the ground of Swift and i20.

[RSR]

Honda has unveiled the 2014 Fit (Jazz) for the North American markets at the on-going NAIAS (Detroit Motor Show). And unlike the Jazz for the other markets (including Japan), the North American Fit has solid, protruding bumpers. Take a look at the North American Fit's rear bumper:



And compare it with the the rear bumper of the Jazz/Fit for the rest of the world:



Pictures courtesy: indianautosblog.com & thecarconnection.com

The difference is obvious. Due to the rear crash safety requirements of the United States, Honda (like many other manufacturers) has been forced to beef up the rear bumper. The rear bumper on the Jazz/Fit for other markets remains a bumper only in name and form, but hardly in function.

Considering India's nasty traffic conditions, I hope Honda give us the rear bumper of the North American model, along with increased ground clearance. But knowing Honda, and also the necessity to keep the new Jazz within the 4m mark, it may just be asking for too much.

The 2014 Jazz is a fantastic car, and I hope Honda don't mess up the pricing as they did the last time.

[DCEite]

Will the Jazz be launched with City's i-VTEC motor? Any chance?

That would probably make it a great value buy, assuming it to be priced atleast 1.5 L less than the City per Variant.

[damager21]

Originally Posted by DCEite

Will the Jazz be launched with City's i-VTEC motor? Any chance?

That would probably make it a great value buy, assuming it to be priced atleast 1.5 L less than the City per Variant.

It will come with Amaze's petrol engine which is 1.2 litre. If they were to offer City's 1.5 litre petrol engine, the excise tax on Jazz would double to 24% from 12% and make it expensive.

[aim120]

Its not only the rear bumper which is different ,even the front bumper is bigger in the US Fit.

[vb-saan]

Originally Posted by RSR

Considering India's nasty traffic conditions, I hope Honda give us the rear bumper of the North American model, along with increased ground clearance. But knowing Honda, and also the necessity to keep the new Jazz within the 4m mark, it may just be asking for too much.

Normally manufacturers does not add on anything considering India’s traffic conditions, except for a few who comes with a rough road package, raised GC etc.

But what you mentioned probably is the case. The US Jazz (Fit) is above 4m in length, whereas the model for rest of the world is around 3.9m (3955mm as per a Singapore website).

[k_ajay]

Many seem to be commenting that Honda hopefully don't mess up the Jazz's pricing.

What are we expecting the Jazz's ex-showroom prices to be? Your guesses?

I hope we're realistic as last time they messed up pricing but now pricing of almost all automobiles has increased several folds in the last 5 years.

I don't know what expectations we have for the petrol Jazz when Brio petrol itself starts at 5.29L [MT] and ends at 6.83L [MT] / 7.75L [AT], on-road B'lore, for petrol metallic paint variants.

I cannot see the Jazz being cheaper than 5.99L on-road B'lore for the base variant.

[vb-saan]

Originally Posted by k_ajay

Many seem to be commenting that Honda hopefully don't mess up the Jazz's pricing.
What are we expecting the Jazz's ex-showroom prices to be? Your guesses?
I hope we're realistic as last time they messed up pricing but now pricing of almost all automobiles has increased several folds in the last 5 years.

I expect the diesel top variant to be priced on the lines of VW Polo GT TDI. Personally I felt that the Jazz was well-priced for what it offered in the previous avatar as well. Unfortunately the market then was not so receptive to expensive hatchbacks. And I hope they don’t dilute the car much (in the name of localization) when it gets to India.

[damager21]

Originally Posted by k_ajay

Many seem to be commenting that Honda hopefully don't mess up the Jazz's pricing.

What are we expecting the Jazz's ex-showroom prices to be? Your guesses?

I expect the launch price to be in the range of 5.3 lacs ex-showroom Delhi. As mentioned in my previous post, Honda will have a saving of 15% excise duty on Honda City price because of its length (4m+) and bigger petrol motor (1.5 litre). This 15% reduction will itself bring down the price to 6.3 lacs.

Beyond this, Honda will have lot of cost savings on components considering Jazz is smaller than City.

[aim120]

Originally Posted by damager21

I expect the launch price to be in the range of 5.3 lacs ex-showroom Delhi. As mentioned in my previous post, Honda will have a saving of 15% excise duty on Honda City price because of its length (4m+) and bigger petrol motor (1.5 litre). This 15% reduction will itself bring down the price to 6.3 lacs.

Beyond this, Honda will have lot of cost savings on components considering Jazz is smaller than City.

Honda Jazz is priced higher then the City internationally ,so I don't think its cheaper to make vs the bigger City.

[zenren]

Originally Posted by aim120

Honda Jazz is priced higher then the City internationally ,so I don't think its cheaper to make vs the bigger City.

There are at least some international markets where a sedan is taxed less than a hatchback. There is at least one country I remember reading about it (though I forgot which one it was) where Dzire costs less than Swift. So the cost to build a car should not be derived from prices in international markets.

[deetjohn]

In the international markets, the hatchbacks are costlier than the respective sedans. Case in point, the Ford Fiesta Sedan and Hatch in US, the Honda Jazz/ City etc.

Its not due to tax, but cost of production. Hatchbacks are costly due to the 5th door, the wash/wipe, additional plastic trims, the rear windshield, hydraulic struts etc. Sedan is relatively simpler to put together and requires lesser number of parts.

India is a different story altogether. Cost is directly proportional to the area that a vehicle occupies on road.

[zenren]

Originally Posted by deetjohn

Its not due to tax, but cost of production. Hatchbacks are costly due to the 5th door, the wash/wipe, additional plastic trims, the rear windshield, hydraulic struts etc. Sedan is relatively simpler to put together and requires lesser number of parts.

5th door in hatch - wouldn't the boot lid of a sedan cost similarly?
wash/wipe - agree that this is an extra cost but its certainly not a huge cost.
additional plastic trims - wouldn't the inside of the sedan's boot need similar plastic trims?
rear windshield - even sedans have rear windshield!
hydraulic struts - even the boot lid of most sedans need a similar mechanism. I dont think we have that rod (like in bonnet) to keep the opened boot lid in place anymore.

I don't know if it was really the tax alone or something else that makes the sedans cheaper in some markets but I certainly don't think a longer sedan will be cheaper to produce in terms of the actual production cost. Steel and sheet metal are not that cheap anyway.

EDIT: Swift costs 8L peso in Philippines while Dzire costs 7L. Difference? Dzire is a regular sedan with the frugal 1.2L engine while Swift is a sporty hatch with the 1.4L engine. For India they'll certainly share the engines or give the bigger engine to the 'bigger' car.

[swiftnfurious]

Originally Posted by deetjohn

...Its not due to tax, but cost of production. Hatchbacks are costly due to the 5th door, the wash/wipe, additional plastic trims, the rear windshield, hydraulic struts etc. Sedan is relatively simpler to put together and requires lesser number of parts...

Originally Posted by zenren

...I don't know if it was really the tax alone or something else that makes the sedans cheaper in some markets but I certainly don't think a longer sedan will be cheaper to produce in terms of the actual production cost. Steel and sheet metal are not that cheap anyway.

I think we had a lengthy discussion on the Fiesta hatch thread some time back where one of the guy working for Ford cleared the air that hatches are costlier mainly due to the additional sheet metal usage (compared to sedan).

[satyaanveshi]

Originally Posted by damager21

I expect the launch price to be in the range of 5.3 lacs ex-showroom Delhi. As mentioned in my previous post, Honda will have a saving of 15% excise duty on Honda City price because of its length (4m+) and bigger petrol motor (1.5 litre). This 15% reduction will itself bring down the price to 6.3 lacs.

Beyond this, Honda will have lot of cost savings on components considering Jazz is smaller than City.

I think you are being overoptimistic with respect to the next-gen Jazz's pricing.

First of all, a hatchback is not necessarily cheaper to produce than an equivalent sedan. Hatchbacks require additional strengthening around the C pillar and this can add to costs. Secondly, the City's engine is sub 1.5l (1498cc) and hence attracts an excise of 24% and not 27%. That said, the Jazz with a 1.2l petrol or 1.5l diesel will only attract 12%, so there is a substantial saving there though somewhat less than what you claim. Thirdly, the Jazz is not much smaller than the City. The width and the interior space are about the same. Only the sedan's protruding boot is absent and the wheelbase is a little smaller. All said and done, since the Jazz and the City share the same platform, their production costs are likely to be in the same ballpark. If at all, the Jazz may be marginally costlier on a per unit basis, especially if its smaller volumes necessitate the import of any components that are not shared with the City.

But most importantly, cost is only one of several factors that impact pricing. I think the factor that will have the greatest impact on the Jazz's pricing will be the success or otherwise of the new City and the Mobilio. It is for a reason that these are being launched before the Jazz.

Honda clearly views the Brio, Amaze, City and Mobilio as being more 'suited' for the Indian market than the Jazz. This is not to say that the Jazz will find no takers, but if (say) the Amaze and the Jazz were to be priced similarly, there would be more buyers for the Amaze than for the Jazz. And given that the Jazz is from a fundamentally more expensive platform, it will generate lower margins than the Amaze at the same price. Likewise, the City's costs are probably in the same ballpark as the Jazz, except for the excise, but the City can command a much higher pricing that more than offsets the higher excise. So the City will generate more margins than the Jazz. The Mobilio being based on the Brio platform will have relatively low costs, and can also command higher pricing being a UV. Again, margins are likely to be higher than the Jazz.

If there were no constraints on production capacity, it would make sense for Honda to sell as many units of the Jazz as the market can take even at wafer-thin margins. However, in practice, Honda is capacity-constrained. Even after including the new Tapukara plant, media reports suggest a capacity of only around 20k cars per month. Of course, this number is only indicative as actual capacity will vary depending on the models being produced, the number of shifts, any supply chain bottlenecks, etc. Nonetheless, if the City and Mobilio are successful in the market, there may not be much spare capacity for the Jazz and Honda would be tempted to price it higher to make the most out of this small volume. On the other hand, if the City and the Mobilio don't do well enough and leave behind a substantial amount of un-utilized production capacity, Honda will face some pressure to price the Jazz at lower levels to generate more volumes.

In summary, I think Honda will first try to generate as much volumes as possible from the Brio, Amaze, Mobilio and City. The Jazz's pricing will be substantially influenced by Honda's success (or the lack of it) with respect to these four models. While Honda is unlikely to repeat its earlier pricing disaster (at one time the Jazz was priced at 7.30-7.70 lakh ex-showroom - this was before the major price correction in 2011), expectations of pricing around 5.30-5.50 L are, IMHO, grossly overoptimistic.

If the City and the Mobilio do reasonably well, I think the Jazz will be launched only in higher trims and the ex-showroom price won't be less than 6.50 lakh for the petrol version, which is approximately the current ex-showroom price for the i20 Asta petrol. On the other hand, if the Mobilio is a disaster, we may see a lower trim Jazz (sans ABS and airbags) priced at around 5.7L.

I also happen to think that the City and Mobilio will do well and hence the odds of a sub-6 L Jazz are, well, pretty low.