[vista_qjd]

I think its the vento which brought Honda to its heels. Petrol prices contributed to it as well, but a diesel vento at the same price is a tough option to beat.
Must say though that this pricing is really attractive and should bring in good sales. Very tempting i must say.

[tj123]

Truly there was no choice left for Honda but to reduce prices to compete against the onslaught of new entrants.
Honda don’t have a good line up of fresh models to sustain in the market adding to this no diesel does not help matter either.
I always felt that Honda cars are over price feels vindicated with this move. Next Jazz prices should also be reduced by a lac to rake in a decent numbers for Honda.

[veyron_head]

Originally Posted by GTO

High Points:

- Related Discussion on Honda India (a SWOT analysis) : The Way Forward.

- Honda today announces a new price structure for the City. These prices will be effective from June 14, 2011.
.

- In a way, Honda has just made official the discounts that its dealers were already offering. In the last quarter, discounts of upto 50K were not uncommon. Question is, will dealers offer a further discount on the new ex-showroom prices?

- Expect all future launches, especially the Brio, to be well-priced. Competition is a wonderful thing!

The quantum of price reduction is the key here. They have reduced the prices by approx. 50,000 rupees. Now thats a huge price cut and Honda sure deserves an applause

But on the other hand, how far would they go with only a petrol line up? About 2 years ago this may not have been a burning issue for Honda, but now with the current petrol prices, it sure is. Except the hardcore Honda aficionados, Why would someone buy their cars when there is a similar diesel car available, with the same brand value and service levels (Eg. Vento, SX4).

Honda urgently needs a diesel product line. They could at least think of buying engines from Fiat (like Maruti and GM did), to start with.

It would be a huge challenge to sustain in the Indian Market with their petrol-only line up.

[vb-saan]

Now this is so amazing. Till this morning the thread ‘Honda India – the way forward’ was super active, and suddenly this thread of price reduction came in. Almost immediately that thread is kind of frozen, and we are here on 7 pages of discussion at this minute.

Moral of the story: The way forward for Honda – Slash the price

[spadix]

Originally Posted by mdsaab

My Q and concern
Will i get the benefit of 44K? as mostly dealers say that the on road price on delivery will be final.
If i speak, will the dealership say, YES Sir we can offer you the new price, but then no further discounts. resulting in me being the loser.

When I bought the Civic last year, it was the first month of the "insurance at INR 1" scheme. Courtesy of the company I work at, I was entitled to a further 5k discount from Honda which the dealer was recommended but not obliged to match. And match they did not, entirely blaming the already reduced margin on the sale courtesy of there being no money to be made on the insurance (external quote = ~32k and Honda Assure quote ~= 52k meaning the dealers make potentially 20k on insurance alone of a brand new Civic).

Please make of that what you will, and I wish you all the best!

Originally Posted by vid6639

They don't have a choice but reduce the Jazz price cos now the EMT City is just a few grand more than the Jazz.

If history is anything to go by, the City E M/T would be killed so as not to cannibalize Jazz sales. Remember what happened to the Civic E when the ANHC was launched?

But history also never saw Honda slash prices, so maybe there is hope.

Originally Posted by vb-san

Now this is so amazing. Till this morning the thread ‘Honda India – the way forward’ was super active, and suddenly this thread of price reduction came in. Almost immediately that thread is kind of frozen, and we are here on 7 pages of discussion at this minute.

That thread talked about multiple solutions and 20,000 ft overviews. This thread takes up - concretely - one of these solutions (price cuts). So I'm not surprised .

If Honda launches a diesel and/or introduces more features without jacking up prices, we'll see one or two more popular threads.

Originally Posted by Equus

Especially down south here in BLR where the road tax is 15% - imagine that!!

It gets even better in AP. Here, road tax is 12% of ex-showroom price if the price is < 10 lacs and 14% if it's >= 10 lacs. See how much of a difference that makes to the OTR price of the ANHC V! Of course, if you already have a vehicle registered in your name - even a Luna - a second vehicle registration in your name will attract 14% road tax irrespective of its ex-showroom price. I would think most potential ANHC buyers have at least a two-wheeler already in their names. But still, I guess they'll take whatever they can get.

Regards,
spadix

[souravc]

Thanks GTO for the news !
Goes to prove that there is nothing better than a kick up the backside from competition to straighten things up -its preposterous to think that Honda suddenly achieved localisation to the extent that allowed them to shave off 45K-66K from the City, its a reaction to the competition which was threatening to reduce it to insignificant numbers . Honda was creaming the market in the absence of any credible competition since the City was a segment by itself independent of the hoi polloi other sedans , it was super normal profit.

Remember the days when Sony used to charge a horrible premium for their innovative products till LG and Samsung spoilt the show ? I am happy that this fantastic car is now right priced, power to the Indian consumers !

[download2live]

If at all it just goes to show how much they were overcharging the customers. And felt smug about it too. It took a Vento to bring them down to realistic level of pricing. I feel kind of strange to see people rejoicing and hailing Honda for a "Brilliant" move. And I feel bad about the people who just bought City only to witness this price cut.

Hopefully Vento juggernaut will keep on rolling and will force Honda to up the equipment levels in the car.

[vina]

Originally Posted by Equus

Why is it Brilliant? Lowering the base price also translates to lower insurance and road tax as well - thats what makes it brilliant IMO. Especially down south here in BLR where the road tax is 15% - imagine that!!

I am betting the Jazz cut would be steeper if they want to sell (their pre-launch target of) 2000 cars per month. Jazz makes an awful lot of sense even upto 50-70K more than i20 Asta & Polo Highline petrols.

Game on!

it would be "brilliant" if it were something non-obvious. It would also be brilliant if it were one of a set of multiple choices which on the face of it might not be great.

This is practically the only thing Honda can do right now (and EVERYONE has talked about this option for months on team bhp and elsewhere - so nothing innovative about it) if it has to avoid extinction from the Indian market. Dwindling sales in today's Indian environment = lost dealers within a matter of months = no good service options for existing cusotmers = no future for the company. And that is what Honda is dealing with.


Whether they truly cut the costs of the vehicles or not they would be forced to cut prices (even if this means losses in the near term) if they care about remaining in this market at all.

[RS_DEL]

Originally Posted by veyron_head

The quantum of price reduction is the key here. T buy their cars when there is a similar diesel car available, with the same brand value and service levels (Eg. Vento, SX4).

Honda urgently needs a diesel product line. They could at least think of buying engines from Fiat (like Maruti and GM did), to start with.

It would be a huge challenge to sustain in the Indian Market with their petrol-only line up.

* The diesel vs petrol price disparity that exists in India WILL go. At best it will be allowed to exist at a level which is nominal. Since this is a political hot potato it will take time. Most likely this mess will land in the lap of whoever forms the next government at the centre. So while the opinion of the vast majority (including me) is that Honda needs a diesel option in their product line up it is not as if this is the only option.

* Following from the above they(Honda) could well go the CNG/Autogas(LPG) route. This is a stabler and more viable plan of action. It will enable them to take on the green tag while enabling a cost of operation of their products that is much much lower than petrol. This will also alllow them to leverage the current product line up without major changes to it. I know to some it may sound sacrilege but then one can not wish away the realities of the world we live in.

[vina]

Originally Posted by download2live

If at all it just goes to show how much they were overcharging the customers. And felt smug about it too. It took a Vento to bring them down to realistic level of pricing. I feel kind of strange to see people rejoicing and hailing Honda for a "Brilliant" move. And I feel bad about the people who just bought City only to witness this price cut.

Hopefully Vento juggernaut will keep on rolling and will force Honda to up the equipment levels in the car.

It may also be that they are good at making high quality products but bad at both keeping the costs reasonable and marketing - for example if they have been forced to sell at 0 (or even negative) margins just to prevent complete annihilation from Indian market.

[spadix]

Originally Posted by vina

it would be "brilliant" if it were something non-obvious.

+1 - just what I said earlier saying that this was *necessary* but not *sufficient*.

I still have some doubts though.

I don't know what Honda India's cost structure is. Let me play devil's advocate and say (in the absence of no new product releases, like, yesterday) what if these price cuts make their margins so thin that they cannot support their staff/vendors/dealer network here? That would lead to the same outcome you described. Given the bad hit the parent company took this quarter, there's no one to bail them out as well.

I hope I'm wrong.

More importantly, I wish we'll see at least two new Hondas other than the Brio (ANerHC and NHCivic) later this year, diesel or not.

Regards,
spadix

[vina]

Originally Posted by spadix

+1 - just what I said earlier saying that this was *necessary* but not *sufficient*.

I still have some doubts though.

I don't know what Honda India's cost structure is. Let me play devil's advocate and say (in the absence of no new product releases, like, yesterday) what if these price cuts make their margins so thin that they cannot support their staff/vendors/dealer network here? That would lead to the same outcome you described. Given the bad hit the parent company took this quarter, there's no one to bail them out as well.

I hope I'm wrong.

More importantly, I wish we'll see at least two new Hondas other than the Brio (ANerHC and NHCivic) later this year, diesel or not.

Regards,
spadix

Well even if they make a little loss in the short term, they can hope to revive their fortunes with Brio launch if they still have their network intact.

On the other hand if they lose dealers now, Brio will run the risk of becoming a flop, blame petrol prices and half a dozen options (Figo, Swift, Beat, Polo ... and upcoming Liva) for that.



The only thing this move means is that Honda is (finally) serious about remaining relevant in India. From what I saw on the roads of Shanghai, they are not that big in China, and with the revival of GM and Ford in US they are having a tough time there too - India is practically the next frontier in automobiles.

[veyron_head]

Originally Posted by RS_DEL

* The diesel vs petrol priced disparity that exists in India WILL go. At best it will be allowed to exist at a level which is nominal. Since this is a political hot potato it will take time. Most likely this mess will land in the lap of whoever forms the next government at the centre. So while the opinion of the vast majority (including me) is that Honda needs a diesel option in their product line up it is not as if this is the only option.

You have a point there. But methinks, the diesel subsidy is here to stay. The govt may try to mitigate this price disparity by charging a upfront lumpsum amount when you buy a diesel car. But to remove the subsidy on diesel and pricing it on par with petrol may be too much of a task to handle, considering the uproar it would bring up from farmers and other communities that depend on low diesel prices.

Originally Posted by RS_DEL

* Following from the above they(Honda) could well go the CNG/Autogas(LPG) route. This is a stabler and more viable plan of action. It will enable them to take on the green tag while enabling a cost of operation of their products that is much much lower than petrol. This will also alllow them to leverage the current product line up without major changes to it. I know to some it may sound sacrilege but then one can not wish away the realities of the world we live in.

I know nothing about LPG/CNG tech, but from hearsay, I gather that performance is compromised on LPG/CNG cars (when compared to petrol/diesel). To add to that, There is no precedent of a LPG/CNG car in this segment (City's Segment) or above, is n't it?.

[karanraheja]

Originally Posted by download2live

I feel kind of strange to see people rejoicing and hailing Honda for a "Brilliant" move. And I feel bad about the people who just bought City only to witness this price cut.

So you would rather call it a "desperate" move? That is actually a fact which makes it a "good" move ( happy??) . Just FYI i purchased the ANHC S MT at around 9.10 lacs OTR in April '09 and my friend picked up the same model close to 10 lacs OTR just a year later . If you are feeling bad for people who just bought the ANHC , imagine the people who had bought the Fiesta just before the Fiesta Classic launch. Lets face it , it was about time Honda had done something to their bread and butter model . Though the price cut may not be the best option ,but for the time being Honda thinks so ! Lets hope we get a better loaded facelift ANHC soon !

Originally Posted by StarrySky

Honda has been already offering big discounts on the City for some time now, so I wonder how much is this move actually going to help Honda sales.

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 .

[adimicra]

This indeed is a desparate move.
Honda themselves had said sometime back that hey enjoy much higher margins in the ANHC than Jazz. Now with the competition really heating up with Verna, Vento and Fiesta and ANHC being the bread and butter model, they had to do this.

But, I have my doubts on Jazz. If they had to do it for Jazz, then why not last year? Jazz has not been selling well for the last 2 years and all the hatchbacks like Polo,I20 etc have been launched a year back or more. If they had to do sometihing with the Jazz, then they should have responded long back. What they can do with Jazz is a rejig like Fabia - strip down the features, have couple of lower priced variants and make it more accessible to the normal hatchback buyer.

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!