[VahanPujari]

Originally Posted by Jaggu

Final sign off, taaaaa!

Join the party !! Had done it much earlier - 10 pages back, came back only to urge you to continue till the debate goes on. Why?

Because all your posts were more balanced & relates better. I tried to communicate some of these things when I participated in the debate. Unfortunately being a Linea-owner whatever I mentioned for SX4/Verna/Fiesta/Linea (non-ANHC) got understood for Linea. Would like to mention some few such points & my clarification to some earlier points before signing off again:

• I still repeat, the comparison should have been done with V-MT (which has Alloys) prices & not with S-MT
• I'm glad that lack of Alloys & Climate control were accepted later (against throwing after-market Alloys). But with additional price or at current given price?
• The comment I made on typical buying decision process citing my example was not for Linea alone. It was for SX4/ Verna/ Fiesta/ Linea (non-ANHC) about these customers not considering ANHC as VFM. Thats why I cited almost equal (if not more) buyers do not consider ANHC offering them more value. It got understood for Linea. Lets see the figures cited in this thread for last 6 months sales:

Honda City : 30275
SX4 : 8797
Linea : 9093
Fiesta : 7605
Verna : 10975

36470 customers out of total 66745 above i.e. 55.6% customers do not consider ANHC offering more value & chooses SX4/ Verna/ Fiesta/Linea. So the comment that majority of the market considers ANHC as VFM does not hold true, IMO. Its actually the other way round.

I never meant to say equal number of buyer (50%) consider Linea as VFM. Linea can never compete with ANHC. Period. Its from a company which is a dead duck a few months ago with a measly 200 cars p.m. sales. Even a mention of Linea competing with ANHC is an achievement in itself.

Also, on the forum sometime back we've agreed that only the Product (car as a product being excellent or bad) itself can not ensure success or failure of it. There are whole lot of key biz parameters - Product, Place (Dealer Network), Price, Promotions, People (staff/ associates & image), A.S.S. etc etc

• I'm glad that after some debates SX4 was accepted as being VFM considering its better Resale Value. Linea's resale value WILL not be comparable to superior one of ANHC & the resultant drop in value is more because of Fiat's undoing with a horrible past. Similar may be the case of Fiesta & Verna (to some extent) as ANHC resale is a constant while comparing with all these 4 other cars.
• Opportunity cost is not mentioned by anyone. If one saves 1.5 - 1.75 lacs, obviously it'll be invested - most conservative bare minimum is FD where after 5 years this money will become 2.75 to 3 Lacs. Again citing my example -out of above 1.5 - 1.75 Lacs, I invested 1.25 Lacs in Stock market & rest in FD. That 1.25 Lac has already become 2.40 Lacs as of today + balance amount FD interest is adding daily.
• Another Response to me was that I value features over other product attributes which are important to other product attributes which are more important to THE MARKET. I would like to state that its not like that. I do not value features ignoring important product attributes COMPLETELY. Product Attributes of all these cars - SX4/ Verna/ Fiesta/ Linea are not all that bad as its made sounded like. And I still repeat - Most modern cars are Reliable.
• Though Resale is very important, not all buyers consider it as most imp while purchasing a new car. My car patterns - Ford Ikon & Linea - shows that. I always consider 0 resale (over 5-6 years period) while coming to buying decision. And there are considerable people like me. If above figures are to be taken, even if we leave out SX4 with higher resale, there are 41.5% (27673 customers out of total 66745) have bought Fiesta/ Verna/ Linea leave aside some other cars in the segment which though very small numbers but still sells.

One more clarification before I sign-off. This is OT but I did not reply earlier staying away from posting, hence. I mentioned a probable trend that customers are moving away from underequipped car citing Accord vs Superb & that segment.

GTO - you responded to it saying I've to get my fats right before posting & mentioned below:

Jan : 248
Feb : 203
Mar : 326
April : 230
May : 212
June : 205
July : 223
Aug : 229

It's glaringly evident that the market does want cars with class leading reliability, all-roundedness + low cost of ownership. The market "isn't" quite moving away from teh Accord.

Now, according to me or if I were a Marketing Head of a Product, it will trouble me if the market is growing at XX% & my product is not growing at minimum, if not more than, XX%. Or to rephrase it, it'll trouble me if If my product is barely able to maintain its monthly avg sales slipping from market-leadership with market-share reducing & a competitor increase the market-share & overtakes my product. TO ME, it means worries - it means my product is not comparatively doing as well as it used to, it means the customers who would have bought my product (as per earlier month market share) are turning away & choosing another brand. This is the context I mentioned it.

Anyway, signing off again.

[shrinivasap]

This is one of the finest thread here in Team BHP froum - well moderated by GTO with very balanced views. I have been folowing from Day 1 but didnt join because of my signature - i own a ANHC. I know that whatever i say would be treated as "Ba Ba Ba Ba" from a blind Honda Man.

Well do i have a choice? Nope- all I wanted was a -> Well refined Automatic Petrol car in C segment.

Is there any choice?


Srini

[geeash]

All the cars listed here are good cars. choose the one which suits your need as everyones requirement is not the same.

[karanraheja]

Originally Posted by VahanPujari

36470 customers out of total 66745 above i.e. 55.6% customers do not consider ANHC offering more value & chooses SX4/ Verna/ Fiesta/Linea. So the comment that majority of the market considers ANHC as VFM does not hold true, IMO. Its actually the other way round.

Please note that you are bringing in sales of diesel in comparison too!! Verna, Linea and Fiesta sales come mainly from its diesel. Now dont gimme your " Why didnt Honda launch a diesel"?

[greenhorn]

Its a level playing field in terms of price(we are discussing the pricing aspect, arent we?) . If other manufacturers give us diesel options, why should that be held against them when counting their numbers?

[neoonwheels]

Went through all the pages last weekend. All I can say is "Overpriced" is a relative term. 10L car without alloys and ACC could be a VFM buy for one person for its badge and at the same time 8L car with 4-5 years free fuel (Would cost 2L lets say) is VFM for the other person. There is no end to this relativity theory guys. Guess what it really narrows down to the person buying a car whether its overpriced or not at the end.

@GTO: Fantastic write up.

[Voyager-1]

The common understanding of a buyer about a premium product in day to day life is that, the premium product is supposed to offer ALL the features that is offered by its non-premium siblings PLUS other additional features which justifies it to demand a premium.

When the same is applied to ANHC, the lack of features like ACC, Alloys, CD player etc doesn't 'seem' to justify the non-ANHC buyer, the premium ANHC demands. But, the point what GTO is trying to drive is that along with the 'physical features', the abstract things like reliability, low cost of ownership etc.. also need to considered as features and need to be weighed and compared.

I think that the crux of the debate is that the abstract features could not be quantified well enough to compare with other cars and determine if ANHC is overpriced or not.

[GTO]

Originally Posted by VahanPujari

36470 customers out of total 66745 above i.e. 55.6% customers do not consider ANHC offering more value & chooses SX4/ Verna/ Fiesta/Linea. So the comment that majority of the market considers ANHC as VFM does not hold true, IMO. Its actually the other way round.

This is absolutely RIDICULOUS! Maruti has a 40% market share in the country. Applying the most basic analytical approach, and dollops of common sense, this means that Maruti is the dominant player in the country, and enjoys the highest market share. In other ways, a MAJORITY OF THE MARKET sees value in Marutis products, MORE THAN for any other single brand. We'd have to be incredibly naive or blind, or both, to comment that "60% of the market doesn't consider Maruti as good value". Of the total share of the market, WHO HAS THE LARGEST?

Apply the same situation to the C segment. In other words:

- Honda has a 45% market share of the C segment! Read = MORE than any competitor.

- More people choose the Honda City than any of its direct three competitors.

- The Honda City, even with only a petrol engine, outsells competitors offering diesels!

- Car versus car, individually, for each person that chose a SX4, 3 chose the ANHC. Ditto for the Verna. Ditto for the Linea.

- Despite a higher asking price, the Honda City outsells all of its competition. Speaks a lot of product merits & faith in brand values IMHO.

And if we are to apply VahanPujari's unique logic to each of the cars in the C segment, to see what % of the market DID NOT BUY a particular model (Innovative, I must admit), here are the results. For the first time, we are analysing each individual model and calculating what part of the market DID NOT BUY that car! In other words, what the car lost versus what the car gained:

- 86.81% did NOT consider the SX4 as good value (8797 / 66745)

- 86.37% did NOT consider the Linea as good value (9093 / 66745)

- 88.60% did NOT consider teh Fiesta as good value (7605 / 66745)

- 83.55% did NOT consider the Verna as good value (10975/66745)

- 54.65% did not consider the ANHC as good value (30275/66745)

Its amply clear that more customers see value in the ANHC than any other car. Who has lost the least? Which car do the least number of customers AVOID?

GTO - you responded to it saying I've to get my fats right before posting & mentioned below:

Unfortunately, you did get your facts wrong. What you posted was:

Precisely this is the trend I'm talking about of customers starts moving away from underequipped cars.

The consistent sales figures of the Accord show that NO ONE is moving away from a well-engineered, reliable, cheap to maintain all rounder of a car. It is able to get the same number of customers as earlier. Please understand that there is a subtle, yet significant difference between "customer starts moving away" as in lower sales, compared to the segment expanding, and loss of marketshare.

Fact is, Skoda Superb or not, and diesel advantage / disadvantage or not, the Accord has maintained consistent sales figures all throughout the year.

Jan : 248
Feb : 203
Mar : 326
April : 230
May : 212
June : 205
July : 223
Aug : 229

It's glaringly evident that the market does want cars with class leading reliability, all-roundedness + low cost of ownership. Features IS NOT the only thing that makes a car, there are far more equally / more important parameters to an automobile.

[WhiteKnight]

Guys, accept the facts. The market is always right.

Originally Posted by VahanPujari

Honda City : 30275
SX4 : 8797
Linea : 9093
Fiesta : 7605
Verna : 10975

36470 customers out of total 66745 above i.e. 55.6% customers do not consider ANHC offering more value & chooses SX4/ Verna/ Fiesta/Linea.

A car that holds 45 % of the market cannot be "Over-priced", unless there is another car that holds >45% of the share.

Do we have any?

Originally Posted by VahanPujari

So the comment that majority of the market considers ANHC as VFM does not hold true, IMO. Its actually the other way round.

That is a brand new approach to market analysis and statistics in general. Shall we call it "My Glass is empty" approach?

ANHC sells 176% more than the nearest competitor (Verna).

Finally, why are we talking about Linea? This thread was never intented for that

[amit]

So many replies, such a long thread and we still don't know the following with figures. Entire discussion is based on perceptions and hearsay.

- how much more overpriced the City is? .

- Honda is more fuel efficient. How much more fuel efficient is it compared to competition?

- Cheap to service. How much cheaper? How can we compare service cost of OHC to Verna/Fiesta/Linea?!

- Cheap spares. How much cheaper? Where are the figures?

I am not good at this but I'll give it a shot.

When we say overpriced, we say City is priced 1 lac more then competition. Is it? What about cost of missing features? Lets try. All prices ex-showroom Mumbai.

City S MT 8.84
City V MT 9.31 (Adds Alloys and Fogs for 47K more)
Verna SX 7.48
Linea E PK 7.47
Fiesta S 7.47.

One pays 1.36 lakhs for a City over Verna and Linea. What about cost of missing features? I also discovered that S has some silly features removed. It does not have driver's seat back pocket and tweeters. At 8.84 lacs? Wow! Imagine the fortune Honda must have saved by knocking off these features!

Alloy's (4 nos) 40,000. Yes after market is cheaper but we are talking Honda prices. See difference between S and V above.
Fog lights 10,000.
ACC 25,000
Blue&Me 25,000
My car 20,000

So effectually a City costs 2,57,000 more then Linea, 2,11,000 more then Verna and 1,87,000 more then Fiesta. Do note I haven't added the cost of small features like rear A/C vents, sun blinds etc. The high price is because of better resale we say. So the I-Vtec engine + better resale will equal 2,57,000 more? Can we sell a 5 year old City for 257K more then Linea? What about the interest cost of the 257K you save upfront for 5 years?

If we bring in diesel's things can get worse, MUCH worse. Example, Linea MJD E PK is 8.61 that's 23K LESS then City with more features, Verna is 41K less then City S but since we are clinically comparing petrols, let's stick to that.

- Honda's are more reliable hence the higher cost. How much more reliable? 10%? 20%? 50%? Surely not 50%. Even 20% is stretching it. How many ownership reports of Fiesta, Verna, Linea talk about engine, mechanical, suspension problems and failures? Can we have figures?

- Honda's are more fuel efficient. How much more? 1kmpl? 2kmpl? 5kmpl? We have plenty of ownership reports here. Different drivers driving in different conditions. We can easily get figures to prove it. Why don't we?

- Servicing costs. How much does the service of a ANHC (NOT OHC) cost compared to Verna, Fiesta and Linea? Do we have figures? Or just perceptions? Honda's are supposed to be cheaper to service so it must be.

- Cheap spares cost. Figures? Where are they? How about something like what ACI does? I have one sheet from the Fiat website. I know it's not the most reliable since it's from a manufacturer and could be designed to make them look good but it does give us pointer's doesnt it? So let's see.

- Oil filter Linea Rs.90, City Rs.155, Verna Rs.85, Fiesta Rs.94, SX4 Rs.89. Guess who's the highest?

- Air filter Linea Rs.229, City Rs.459, Verna Rs.377, Fiesta Rs.257, SX4 Rs.387.

- Wipers Linea Rs.490, City Rs.712, Verna Rs.934, Fiesta Rs.550, SX4 Rs.450. Mind you, Linea wipers are the flush fit ones yet are the cheapest?

- Let's progress to mechanical parts.

- Fuel pump Linea Rs.2500, City Rs.15,608, Verna Rs.2,644, Fiesta Rs.3733, SX4 Rs.2712. Wonder why all non-Honda cars are within 1000rs of each other while Honda overshoots them by four figures. Go ahead and say it's because it's a Honda so very reliable and hence high cost upfront. When was the last time a Verna's fuel pump failed? I haven't heard of any yet.

- Accident parts.

- Headlight Linea Rs.3900, City Rs.4103, Verna Rs.4103, Fiesta Rs.4355, SX4 Rs.3155.

Despite all this, I feel, yes Honda's deserve a premium over competition. But how much? Provided Honda gives the same major features as competiton, I am willing to pay 50-60K more, 75K at a stretch. We are looking at 250K more here.

I am attaching the sheet.

Attachment 195806

Owners of respective cars can tell us if the sheet is genuine. Do note that the prices are for Jan-Feb 2009. I paid 1,500 for side mirror casing for Punto. Rs.1555 to be exact. Linea should be no different.

[navin]

Originally Posted by GTO

It's glaringly evident that the market does want cars with class leading reliability, all-roundedness + low cost of ownership. Features IS NOT the only thing that makes a car, there are far more equally / more important parameters to an automobile.

Exactly. This is why we got our ANHC too. Would we have loved having electrically foldable OVRMS (the i20 has) - sure we'd even have paid for it as an option, would we have liked having Alloys standard (the Linea does) - sure but in the end it is the total customer experience.

It is not that Honda (or it's dealers) offer a very good experience but compared to Skoda, GM, Tata-Fiat, etc. they are saints. Only Hyundai and Toyota are better (in the C & D segemnt). We've not had any trouble with Maruti either so in the end a buyer settles on the brand that gives him/her the least hassle.

Case in point Skoda Superb vs Honda Accord. Feature for feature the Superb should have eaten the Accord lunch. But the Accord still holds market share. Is the Accord the better car? Does Honda and it's dealers offer better total customer experience (during sales, service and over the entire period of ownership)?

[pmbabu]

Originally Posted by amit

Alloy's (4 nos) 40,000. Yes after market is cheaper but we are talking Honda prices. See difference between S and V above.
Fog lights 10,000.
ACC 25,000
Blue&Me 25,000
My car 20,000

ACC/Blue&Me/My Car can be added at that extra cost? And how were these prices arrived at?

[greenhorn]

Selling Sound: Bose Knows

Bose is supposed to be a premium home audio company. Their products are percieved by most to be the very best. As mentioned in the article, most people would rather buy a bose, and i guess they do sell, a lot.

To the target market, bose seems to be worth its prices. Otherwise it would not sell. I don't have the sales numbers to put here. Ask the man out on the street who makes the best stereos - odds are , he would say bose. Ask the average bose customer about his equipment, and he will probably rant and rave about it.

There are flaws in this analogy - I understand that - such as the fact that most bose owners are ignorant of other similarly priced products etc, but my point here is that the market and the numbers need not be right. not even remotely.

Those of us who know our ICE stay far , FAR away from Most bose products. But I doubt the average bose buyer buys a bose stereo for its sound quality. He buys it "because its Bose" . I recall giving my friend a listen to my 800 buck ep 630. Though he agreed that mine sounded as good as his bose IEMs which cost him about 5~6 times as mine ( he was reluctant to agree that it was better), he was like " so what, mine's a bose". He wouldnt change his mind even after i got hold of some more expensive IEMs for him to audition. For him, it was the brand that mattered. For me , it was the sound

Not everyone is foolish enough to simply throw away their money on a wasteful purchase. but of course , there will always be people who, as the old saying goes, will be parted from their money soon.It depends on which side of the fence you believe you are in

PS: I do admit that we are all subject to post purchase rationalization to some extent.

[narayan]

I think this discussion won't lead anywhere because over priced/underpriced is an individual perception

1) for all that we say about MAJORITY OF C SEGMENT preferring the CITY, I am sure many of those who BOUGHT THE CAR ALSO FEEL ITS OVERPRICED but they may see VALUE in that OVER PRICED LEVEL.
price is just the tag given by the manufacturer, VALUE IS WHAT THE CUSTOMER PERCEIVES. so most likely the CITY seems to deliver VALUE to most buyers in C SEGMENT

2) I am a CITY owner ( 2001 ) but when its time to buy a new car, would I consider the ANHC - no i wont.

I THINK ITS OVER PRICED AND POSSIBLY DOES NOT DELIVER VALUE.

coming to think of it, if you look at the car ownership costs as a simple equation

INITIAL OUTLAY + MAINTENANCE COST - FINAL RESALE VALUE = COST OF HAVING OWNED THE CAR

lot of ppl say the ANHC is low on item 2 above and high on item 1 and item 3. and hence leaving a cost of owned the car on par with many others...

in which case I personally would then buy a car I LOVE OWNING than something that would put a smile on my face WHEN I SELL IT FEW YEARS DOWN THE LINE


bottom line - to the broader market based on pure statistics, the CITY IS POSSIBLY DELIVERING VALUE - ----- OVER PRICED OR FAIRLY PRICED OR UNDERPRICED JUST DOESNT MATTER

[navin]

Originally Posted by amit

Entire discussion is based on perceptions and hearsay.

So effectually a City costs 2,57,000 more then Linea, 2,11,000 more then Verna and 1,87,000 more then Fiesta.

Sales figures are not perception. Do not consider short term sales figures which often are due to dealer promotions or the buzz created by a new car launch but consider figures over 3 years.

A City might be 2L more than it's competition. But the City buyer is willing to pay that difference for peace of mind. The Linea is better looking (my opinion), has more features, is cheaper, and even has better ride and handling but still cannot outsell the City. Why? Answer that!