[srishiva]

Originally Posted by finneyp

I don't agree to that!

Is there is great demand for Jazz to demand a premium price for it?

Honda is just taking its brand image for granted!
I doubt this fool game will run for long!

I think they have built their brand image and are maintaining it. Even if Jazz were to fail, they wouldn't price it differently to dilute the image for the sake of one car.

They have every right to fix their price and people have the option to buy or not. By you having not bought a Honda, have done your part.
Its kind of socialist to expect Honda to do what others have done.

Honda has commanded premium over most auto makers except the european luxury car makers. They are not fooling anyone.

[muralisk]

Well, there is a great deal of emotion that is being mixed with practical business aspect here.

While Honda is free to price their products at levels they feel are acceptable and profitable (as they need to answer their shareholders), we as user/ consumer has every right to either agree and buy their products or disagree and not buy their products.

Now, such pricing difference exists in all the products. Right from cars, to TVs, to clothes, shoes, to pens. Just because some are priced higher doesn't mean that they are either greedy or lack integrity in doing business. It all depends on what market does they target and as long as there are consumers who are willing to pay for their products at that level. Its as simple as that.

For example: I wanted to buy a good roller ball pen and a pencil. After using a lot of local makes, I decided to try out the higher end and tried various makes and finally picked up Sheaffer, as it fits my budget. However, I really aspire to own a Mont Blanc one day. Just becuase, there is a 5 fold price difference at the entry level pens, I cannot term Mont Blanc as greedy and they are ripping off the customers.

I can give many such examples. Like Infy commands higher premium than Wipro, TCS or any other Indian company and they are known to make higher margin as well.

So, its pure economics and demand that they have in the market place.

[Spitfire]

Originally Posted by muralisk

So, its pure economics and demand that they have in the market place.

No one's arguing that. When the government reduces some tax on an item that is part of the pricing which the manufacturer passes on to the customer, its expected that the manufacture passes on any reduction too.

So invariably they have increased their prices by 5K or whatever amount on their product.

The manufacturer wasnt paying for it anyways. So why keep it and extract that amount from the customer.

[muralisk]

Originally Posted by Spitfire

No one's arguing that. When the government reduces some tax on an item that is part of the pricing which the manufacturer passes on to the customer, its expected that the manufacture passes on any reduction too.

So invariably they have increased their prices by 5K or whatever amount on their product.

The manufacturer wasnt paying for it anyways. So why keep it and extract that amount from the customer.

Please correct if I am wrong here.

Is there any rule that the manufacturer has to pass on the benefit to the customer? I am not aware of any such rule. IMHO, I see it as a pure goodwill gesture or a stimulus to increase sales.

For example, during the current slump in the economy, many companies have cut either the base salaries or the variable component for their employees, which does result in cost savings. Are these companies in return passing that benefit to their customers?

No, they are not as they need to improve their balance sheet and show profits so that, their investors are happy.

[finneyp]

Murali, do you mean the Govt gave the tax benefit to the Car company and not to the end customers?

I am very sure Govt intended to benefit the customers and not the Car co.

[muralisk]

Originally Posted by finneyp

Murali, do you mean the Govt gave the tax benefit to the Car company and not to the end customers?

I am very sure Govt wanted to give the price benefit to the customers!

As I see, it is an indirect benefit, which is passed on to the customer as a goodwill gesture. If I am already bleeding to death, just like the OMCs, no one would pass on the benefit. As far as I know, the manufacturer has the right to pass it on to their customers or not.

If government had such a noble intention, they could have slashed something that directly relates to the end consumer or they should have slashed the excise duty across the board rather than just doing it at the top of the segment, where it make very little difference.

Btw, we are discussing so much on the price and all the other aspects, how many people on this forum have first hand information (I mean authentic) on the margins these automobile companies have on selling their cars?

[srishiva]

Originally Posted by finneyp

Murali, do you mean the Govt gave the tax benefit to the Car company and not to the end customers?

I am very sure Govt intended to benefit the customers and not the Car co.

If govt wanted customers to benefit, they could cut the road tax etc., The intent was to help both and the macro economic environment.
By saying what you are, you making Honda Jazz a desirable car and blaming the company of not helping you acquire one.

[tanwaramit]

I agree with the comments made by thread starter and finneyp (not sure if he started it).

The tax of 20K was introduced by government last year to reduce the number of sales of big cars to curb pollution and large drinking of petroleum products. Effect: these cars prices were increased instanteously and customers had to bear the brunt. Now government instead of scrapping this tax, has reduced it by 5k for some cars, so while some car manufacturers have implemented this and passed on the benefit to customers, others arent doing so. Its bad on the part of those, who are not doing it.

Its a tax which comes to your car price included (ex showroom), now other car manufacturers will reduce the Ex Showroom price hence, however, Honda will pay less tax to government and pocket this extra 5k from the customer while keeping the exshowroom price the same. (if this isnt greedy then what else !!)

[Spitfire]

Your question:

Originally Posted by muralisk

Is there any rule that the manufacturer has to pass on the benefit to the customer? I am not aware of any such rule.

Answer:

IMHO, I see it as a pure goodwill gesture or a stimulus to increase sales.

Are these companies in return passing that benefit to their customers?

Heck yes. LOL. I work for a product based company we are giving huge add ons for free because of the recession. Why? Competition. But thats OT as saving on salary and reducing taxes isnt the same thing. Your analogy is incorrect.

No, they are not as they need to improve their balance sheet and show profits so that, their investors are happy.

Whats the premium for?

Also we have an ANHC in the family.

But heck why are we arguing. If you want to buy a Honda then you will pay for it. If not there are options.

I would never buy one for a premium but my dad did.

[GTO]

Doesn't matter whether the tax savings are 5K or 50K, they MUST be passed on to customers. Ford just lowered the Endeavours price by 6,000 rupees. The same arguments that support Honda's move are applicable here as well.

But the difference is : Ford did pass on the benefit to the customer. Even though the Endy is the leader of its segment!

[SkyWalker]

Originally Posted by akj53

It is less about money and all about the attitude and fair business practice.

and what exactly is unfair here? They priced their car at a price which they feel is right. You buy it if you think it makes sense - Else you are free to buy another car - a Camry or a Sonata. By the looks of it, not many are buying a Camry or Sonata compared to an Accord, does it? I don't think its going to change due to another 5K difference, either

You can say their cars are overpriced compared to competition - and i would agree. SHould they have passed on the benefits - i would say Yes. But the amount is too small for me to be even bothered. But saying in unfair is a totally different dimension. I guess we still have some time before we used to a capitalistic environment.

Anyway, i don't think 5K on an Accord is an issue i would probably be worried about or want to talk too much about. For me an Accord is still overpriced. I am outta here.

[amit]

Since a lot of us believe that 5K is too insignificiant for a person buying a 20 lakh rupee car, how many of these buyers would pay 5K extra to GM and refuse to take advantage of the price cut to help them tide over their crisis?

[SkyWalker]

Originally Posted by amit

Since a lot of us believe that 5K is too insignificiant for a person buying a 20 lakh rupee car, how many of these buyers would pay 5K extra to GM and refuse to take advantage of the price cut to help them tide over their crisis?

. Amit - i don't know where you come up with these, you are too good!

[Lalvaz]

Originally Posted by Nikhilb2008

This is just biased.

Honda is only one of the two Japanese companies in India. They still have a lot of imports. Their localisation is pretty low. The yen-rupee ratio is screwing them like anything.

Suzuki, Toyota, Nissan, Mitsubishi and Honda. The count is 5 Japanese automobile majors in India. BTW, the yen has appreciated against the US dollar too, but you dont see Honda hiking prices in the US.

Double standards anyone?

However, I feel that Honda like any other manufacturer has the right to price their products as they deem fit. We are perhaps being a little biased in bashing them for being greedy, since we can't afford their products which are really fine cars otherwise.

Gosh I wish I could plonk 8 lacs for a Jazz!

[FlyingSpur]

Originally Posted by DieselFan

It has done much better than companies which has priced their cars cheap (Fiat or Tata for example).

I was going to let this thread be, but I just HAD to ask you something. On the basis of which segment of our market are you comparing Tata to Honda?

Originally Posted by amit

Since a lot of us believe that 5K is too insignificiant for a person buying a 20 lakh rupee car, how many of these buyers would pay 5K extra to GM and refuse to take advantage of the price cut to help them tide over their crisis?

Anyway back to what you said, what a thought! I wish everyone would. I really like some of their products.