Wednesday, June 24, 2009

Cars and value

Honda Jazz is a premium hatchback in the price range of 7 lakh upwards. The price is very close to Honda City - which is a sedan. The question. Will the Honda Jazz sell well?

I read through this review interestingly where Adil Jal tries to convince the reader (more thoughts on zigwheels reviews some other time) that the Jazz is indeed value for money at its price. Perhaps it is and since the reviewer knows more about car than I do, I take it that the car is VFM.

But, the Indian customer is a funny animal.

He did not like the boxy Logan despite its price - the Logan is clearly VFM, right? But the moment a car is sold with its history of being a "low cost" vehicle, it is gone kaput. Next whammy - too many Logan cabs on the road. Gone. (I am not sure exactly sure how Indigo is doing outside the cab market.)

At the same time, the cutely built Nano has got a walloping number of bookings. Cheap car? Yes, but it is also a "Pride of India" and cute and a world first. Result. Hit.

Maruti Swift - absolute value for money, new styling, high on economy. And even with the ugly boot, the Dzire is also much desired car.

I10 - Cute, almost cuddly, zippy - not exactly cheap, but sells well.

So, whats going on? Heres my take.

A small car - subcompact can be sold at many levels - space (Indica), style (Swift) or Quick new kid on the block (i10). I know I am jumping across hallowed categories created in Indian automobiles. The tipping point happens when the marginal utility that you gain by the better engine or speed is lost by the amount of stuff you can carry in comparison or in terms of pure market perception (cabs are a no no). So, an i10 will win - better speed and style as compared to many sub compacts. Indica - pure VFM. Swift - style plus big looking car at a good price. In comes the Jazz - great car, but at the price point near the City, it does not have a boot. Omigosh. Why do I pay so much when it does not have a boot? Of course, the Jazz will appeal to youth, but how many will convert appeal to sales? It does help that Honda does not look at Jazz as a mass market car at all.

But to really know the pulse of Indian consumers, ask Maruti. It has consistently hit the sweet spot of Indian customer needs - though I would like to know how the confusing range of small cars is doing...(surely beating up the competition). Aside, here is a priceless quote from Jagdish Khattar, Maruti MD - Indians dont buy an engine, they buy the car.[ET]

Now for a game changing hybrid or alternate fuel vehicle. Who will bell the ca(r)t first?

4 comments:

Prasanth said...

Honda just decided to stop selling the base version of City !!! Looks like the thought process in the Honda marketing dept went something like this - "Oops, how stupid of us!! We priced the Jazz just about 25,000 rs less that base Honda city!!. What do we do? Oh Ok lets do onething - stop selling the base version of the City. Viola !!! now there is a difference between Jazz and City !! Whooppe!!

Jagannath Moorthy said...

The more I read the Indian auto-magazines, the more I am convinced that their opinions are heavily influenced by their main financiers, i.e. their advertisers. That is why you will never get to hear a very negative review of any car. That's also the reason why a large number of people are shifting to internet forums like Team-bhp for a more balanced view.

Christin said...

Honda cars have a very good performance on Indian road. They are widely sought after for their unique and unbeatable performance. Honda car offer you a wonderful driving experience and are durable enough to be used for many years. Jazz is the new car in this segment with a cost of Rs 7 lacs.

ashlee said...

All the general information of indian car industry is shared in this post. I particularly liked your comment on the status of Logan and NANO "the cute car" as you have called it. http://www.ceattyres.in/tyre-range/tyre-range.asp?vtype_id=Two-wheeler-tyres