[Skyline GT-R]

The inflated price of Duster is courtesy Indian Excise duty structure (because it is above the 4m slab).

Even otherwise i feel the pricing is higher for a 1.5L engine. If Terrano comes with 4WD as standard offering, i guess the price would touch 15L onroad for full option variant.

[Marauder]

It's a clear case of the company cashing in on the demand of the car.When the Duster was launched at 7.19L it was close to the £8,995 price tag of the UK spec although without the safety equipment but now it's in the XUV territory.Also,its the same with other market blockbusters like Swift,Fortuner,Innova etc.the companies hiked their prices repeatedly and still people buy it.

On the brand re-engineering point,unless different brands market themselves to have different qualities they stand to lose volumes and their cars will only eat into each others market share.IIRC,there was a discussion which mentioned a stat which showed that these brand engineered cars sell less put together than they sold alone when the other car wasn't launched.
There has to be a significant difference between the two brands like there is elsewhere in the world i.e. VW/Audi/Seat,Lexus/Toyota etc

I think Renault-Nissan-Datsun could have an arrangement in India where Renault could be the more sporty brand by launching Clio,Megane etc,Nissan could the luxury sort of brand by launching the Altima,Pathfinder and Datsun the cheap one.
P.S. VW-Skoda would also benefit from having some differenting factors

[mallumowgli]

Originally Posted by tsk1979

Any manufacturer will sell a vehicle at a max price. where it can get enough volumes and make tidy profit.
So market research is done and the following factors are considered
1. Base price - What is the minimum price I can sell without making a loss after dealer margins etc.,
2. Market price - How much is market willing to give for this vehicle
3. If competition comes, how much is market willing to give for this vehicle
4. If I decide price X how much volumes can I move.

Though the ultimate aim is to maximise profit, companies like Maruti / Mahindra do not approach it this way. They will have the above details with them, but will rather adopt a penetrative pricing to prise open the market/segment (eg - XUV and Ertiga).

'Price skimming' as it is called, wherein a high opening price is set, is adopted by the haughty Europeans who think that just because they are European or Das Auto, we should all run and buy their brand!!

Originally Posted by Marauder

On the brand re-engineering point,unless different brands market themselves to have different qualities they stand to lose volumes and their cars will only eat into each others market share. IIRC,there was a discussion which mentioned a stat which showed that these brand engineered cars sell less put together than they sold alone when the other car wasn't launched.
There has to be a significant difference between the two brands like there is elsewhere in the world i.e. VW/Audi/Seat,Lexus/Toyota etc

That is a very powerful stat. Any chance you can give the link? While intuitively we all know about brand cannibalisation, the sum of the two adding to less than one is interesting

[tsk1979]

Originally Posted by mallumowgli

Though the ultimate aim is to maximise profit, companies like Maruti / Mahindra do not approach it this way. They will have the above details with them, but will rather adopt a penetrative pricing to prise open the market/segment (eg - XUV and Ertiga).

I am sure the Swift does not cost twice as much to cost as the Alto, esp the petrol version. So if they are so "holier than thou" why don't they sell the swift petrol for 3.5L ex showroom?

'Price skimming' as it is called, wherein a high opening price is set, is adopted by the haughty Europeans who think that just because they are European or Das Auto, we should all run and buy their brand!!

Every company would like to sell a vehicle for as much as they can. Those who can do it, those who can't don't do it.

[mallumowgli]

@tsk : I was not referring to the companies' ethics, but rather to their pricing policy and its success in the market

Maruti and M&M adopts a penetrative pricing : Introduce at a mouth watering price, gain acceptance and then like sinking needle inside a banana ( to borrow a saying from Tamil), increase the price to what you had earlier referred to as the 'Market price'

Whereas in price skimming, the manufacturers try to get a good price when there is no competition, get as much profit before competition enters in and then lower the price. Though this not strictly what Europeans are doing, at least that's what they were trying to do. But the market taught them otherwise!!

As you say, every company would like to sell a vehicle for as much as they can, but it is ultimately the market that determines whether they actually 'can'!!

[Mpower]

Maruti & Hyundai----lots of cars from lo->hi end, lots of sales but only 1 brand (not enough)

Renault-Nissan------small fleet on offer, low sales, too many brands (that are not spaced wide enough)

[vb-saan]

Originally Posted by mallumowgli

A very pertinent point - but Renault has the first mover advantage here in the mini-SUV space. The pricing will remain high till competition comes in with similar products. But to be frank, there is no similar products expected in the market.

Originally Posted by narayan

vb-san
your data is correct and presented well. however i think this has been deliberated at length in various Duster threads. its all a function of what every market has on offer in terms of competition, buyer behaviour, brand perceptions and finally and more importantly GOVT POLICIES ( which include fuel + other taxation norms ).

hence no point in holding any hard feelings against Renault for "overpricing" the Duster.

Originally Posted by BigBrad

While I agree to your point on re-modelling a low cost Dacia product as a Renault one, I beg to differ on price comparisons made.

Just to clarify, the intention of this thread is not to pick on Duster. Used it as an example because it was the first product (from Renault-Nissan) which illustrated this strategy. With the success of Duster, it’s quite clear that they are looking at more options in similar lines (related news here). As GTO mentioned, Datsun revival as a budget brand (with a previous gen March/Micra) is another step in that direction.

Originally Posted by GTO

Added Datsun to the title as well. Hope we can discuss products other than the Duster too.

Thanks for adding Datsun into the thread title.

Originally Posted by GTO

I think they're biting off more than they can chew. Nissan is hardly a well-established brand in India while Renault is still a one-hit wonder. All of Nissan's cars are under-performing currently, their dealers are an extremely unhappy lot and Renault-Nissan share cars so identical that it leads to customer confusion.

Renault-Nissan should be working on strengthening their respective brands. In the midst of this, some genius came up with the idea of introducing a 3rd brand. I thought Nissan was supposed to be cheap, and Renault (allegedly) premium. Where the heck does Datsun come in?

What's worse is that, all 3 brands share essentially the same car. I believe Datsun's first car for India is basically a cheaper Micra.

That’s exactly the point. Their future plans for India looks so skewed. After a reasonably successful Sunny, Nissan followed up with the Evalia, which is essentially a panel van / maxi-cab marketed as a family MPV. And now we hear about this dodgy Lodgy from Renault. In Europe this is essentially poor man’s Renault Scenic, and has the dubious distinction of being one of the lowest rated cars in 2012 Euro-NCAP tests. Unfortunately, it will come to India with a premium Renault badge and priced accordingly.
A worrying trend indeed!

[ssmani]

Originally Posted by vb-san

In Europe this is essentially poor man’s Renault Scenic, and has the dubious distinction of being one of the lowest rated cars in 2012 Euro-NCAP tests. Unfortunately, it will come to India with a premium Renault badge and priced accordingly.
A worrying trend indeed!

An OEM may not sell its "all" vehicles for profit. Some of the vehicles to create brand image (Toyota Prius, Chevy Volt), some of them for not spoiling its brand image ( Dacia by Renault, Dustan by Nissan, Scoda by VW etc), some of them for managing government regulation ( for example, in USA, fuel efficiency of company is calculated, average of all vehicles in a segment).

I beg to differ your sweeping statement only for Renault. There are many such OEMs inside India and outside India. If a farmer/vendor takes his vegetable to a far-away city to sell his vegetables for the price at that city, not to sell at the price of his village!!! I strongly believe, vehicle price is mostly decided by the local market not by the OEMs except "brand image" additional cost.

[headers]

Originally Posted by BigBrad

Localisation and feature cutting have helped VW to price Polo < 9lacs in India. But, a similar level of price reduction may not be possible in the case of Dacia Duster since its a product engineered for emerging markets and targeted at customers preferring VFM over luxury/premiumness. So, what I feel is that, Renault India should have definitely priced Duster on par or slightly less than Dacia Duster. The current price is no doubt an inflated one, but I don't think we can expect a price reduction as much as we see in a VW Polo or other premium brands.

Why not sir? We can definitely expect a price reduction shortly!

Originally Posted by girishglg

A case in point is the probable situation of Nissan Terrano (Duster's twin) launching at a higher price point when all other Nissans are cheaper than their Renault twin. This is confusing strategy to say the least.

Some sources state the Nissans NH79 would be priced atleast 50K less than Renault.

Originally Posted by lurker

thanks to vb-san for the revelation. India probably is just an underdeveloped auto market, where such operators feel they can make some additional margins just by luck of their product being without real competition in the market. Both Fortuner & Duster are horribly overpriced for what they offer.

Also perhaps, they have to take in the cost of operating in the market. India is full of all kinds of hurdles which are set themselves up to heighten the cost of operation of a manufacturer. Right from labour unions, local politicians, tax men, local panchayats, state govts, electricity companies etc extract a percentage of the manufacturers revenue thereby increasing his cost. It is believable if a manufacturer gives a reason that India is a low-cost country for services, but a high-cost country for manufacturing.

Very true - thank you

Originally Posted by mallumowgli

wherein a high opening price is set, is adopted by the haughty Europeans who think that just because they are European or Das Auto, we should all run and buy their brand!!

very well said - Das Auto

[apachelongbow]

Duster worked because there was no competition, rather it created the quasi SUV/Soft roader segment, the only competition was the Skoda Yeti which is way overpriced. So in the 10-13 lac segment, it was 100% assured that a SUVish car would sell if it had some style quotient and had a frugal diesel engine.
Nissan trying the same trick is pretty foolish IMO. Reskinning the nose and either overpricing or underpricing will hurt either Nissan or Renault. Ideally they should not launch their version of the Duster here.

[headers]

Originally Posted by apachelongbow

Nissan trying the same trick is pretty foolish IMO. Reskinning the nose and either overpricing or underpricing will hurt either Nissan or Renault. Ideally they should not launch their version of the Duster here.

No the whole idea of a Renault Nissan JV is to tap into the untapped market using the brand image to sell vehicles rather than technology.

There are few technologically advanced vehicles on offer today in India.

Edit: A lower priced duster equivalent from nissan with some features such as Auto AC, auto locking Doors would definitely sell 5k per month in todays markets.

Only wish they don't manipulate the ride and handling.

[gomzi]

Originally Posted by tsk1979

Every company would like to sell a vehicle for as much as they can. Those who can do it, those who can't don't do it.

Every company would like to make as much profit per unit as possible. Some fail miserably e.g. Honda Jazz (although it sold semi-decent once price was heavily revised in 2011), Ford Fiesta were failures. Whereas New Maruti Dzire is a success, so too, I feel, will be the Mercedes A Class.
Perception is reality and if a non-premium brand/model is perceived as priced too high then it will fail, even price revisions might not help it.

Originally Posted by apachelongbow

Duster worked because there was no competition, rather it created the quasi SUV/Soft roader segment, the only competition was the Skoda Yeti which is way overpriced.

The one company that must be kicking itself on this front is Honda. The CRV was bang-on in the soft-roader segment, priced well when introduced, but Honda has raised its price to unbelievable levels effectively killing it. Oh, and no diesel mill in it either.
If someone wants to learn how to kill a product, they will get many examples from Honda, Fiat and HM in India.

Originally Posted by headers

Edit: A lower priced duster equivalent from nissan with some features such as Auto AC, auto locking Doors would definitely sell 5k per month in todays markets.

On the Nissan Terrano thread, I read that the agreement between Renault & Nissan is that whoever borrows a vehicle design for re-badging will bring it to market at a higher price. E.g. since the Renault Pulse and Scala are based on Nissan Micra and Sunny, they are priced higher. Similarly since the Nissan Terrano is based on Renault Duster, it will be priced higher.
While this makes sense from a financial and R&D point of view, it completely kills brand positioning.

[chittybang]

Originally Posted by girishglg

A case in point is the probable situation of Nissan Terrano (Duster's twin) launching at a higher price point when all other Nissans are cheaper than their Renault twin. This is confusing strategy to say the least.

At least there was an expectation that it would be launched at a budget pricing flanking its twin to cover a much larger marketshare of the mini SUV market and effectively beat the Ecosport (especially if it was priced at a premium).

I believe that Renault and Nissan have an understanding that whoever launches a rebranded vehicle that originates with the other brand they have to price it higher. So the Scala had to be priced abive the Sunny, the Pulse above the micra and similarly the Terrano has no option but to go above the Duster.
Can anyone throw some light on this? Also Skoda and VW seem to have a more clear understanding of their postioning.
It is very clear that Renault looks towards our market only through the eyes of Dacia. This attitude can change only if the competition takes a keener interest in getting their best products over.

[windiesel]

Originally Posted by vb-san

UK
VW Polo 75ps 1.2 TDI: £13,745
VW Polo 70ps 1.2: £12,145
Dacia Duster 110ps 1.5 dCi 4x2: £11,495
Skoda Yeti 110ps 2.0 TDI 4x2: £17,075

India (ex-showroom Mumbai)
VW Polo 75ps 1.2 TDI: Rs. 7,27,769
VW Polo 75ps 1.2: Rs. 6,14,733
Renualt Duster 110ps dCi 4x2: Rs. 12,17,263
Skoda Yeti 110ps 2.0 4x2: Rs. 15,11,327
In other words, the buyers in India are actually paying a huge premium for the lozenge logo.

Originally Posted by Skyline GT-R

Even otherwise i feel the pricing is higher for a 1.5L engine. If Terrano comes with 4WD as standard offering, i guess the price would touch 15L on road for full option variant.

When I went for a TD in a 85 RXL with me wife, the car just didn't feel like a 11L+ machine (more like a 8-9ish lac one), a clear deal breaker for me not forgetting the hard clutch. Renault is actually wrapping up an el cheapo Dacia product and offering it to our considerable masses as a lozenge (mithi goli).

[rajshenoy]

Originally Posted by vb-san

If you look at the above prices, in the UK a Duster with slightly better features than India’s top variant is actually cheaper than entry-level 3 cyl Polo petrol, and almost 50% cheaper than the base variant of Skoda Yeti. That’s the way brand Dacia is positioned in Europe. The picture is drastically different in the Indian context. The Renault branded Duster cost almost double of a highline 1.2 Polo and is only around 20% cheaper than the base Yeti. In other words, the buyers in India are actually paying a huge premium for the lozenge logo.

What is funny is They are exporting Dusters to UK and going by your calculations, They are exporting it and selling in UK at half the price with better safety equipments coming standard