Price drop for the Honda City due to localization, says Honda!
Recently, Honda SIEL cars stunned most car buyers, mostly in a positive way, when the car maker dropped prices on the all new Honda City by a whopping 66,000 Rupees. Following the price drop, the Honda City, whose volumes were falling steadily, became an attractive buy overnight, with sales figures perking up after the price drop. Last week, Honda pulled off another stunner in the form of a discount sale for the Honda Jazz , that saw the premium hatchback’s prices being cut by up to a mind numbing 1,75,000 Rupees.
Car buyers flocked to Honda showrooms, only to realize that Honda dealers were indulging in a fire sale even as the facelifted Jazz is to arrive very soon. Now, the price drop from Honda, a manufacturer which has always been commanding a premium pricing model due to it’s brand value and high quality in India, came as a surprise to many including us.
As the above statement clearly exemplifies, Honda has managed to arrive at the price drop through aggressive localization for the Honda City achieved by sourcing more components locally. Meanwhile, let’s hope that Honda is equally serious about localization of parts for its upcoming small car, the Honda Brio, which could be priced very competitively if indeed Honda manages to sufficiently localize the small car’s imported content.
Honda has been in India for over a Decade and it took them that much time to realize that ‘localization’ is the way to reduce cost? Somehow doesn’t sound right! Honda has had monopoly over ‘premium-ness’ for so long but now a stiff competition from Toyota and Skoda (VW to an extent) has forced them to open the pricing to market. All of sudden, the pricing by Honda looks ‘just right’. VW needs to do the same with its New Jetta, launching next month!
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Following the price drop, the Honda City, whose volumes were falling steadily, became an attractive buy overnight, with sales figures perking up after the price drop. Last week, Honda pulled off another stunner in the form of a discount sale for the
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