csnana

Honda to hike prices by up to Rs 1.5 lakh from Jan

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NEW DELHI: The weak rupee is showing its ugly face. Honda is set to hike car prices across models by Rs 10,000 to Rs 1.5 lakh from January next year

to factor in increased production cost due to depreciation of the rupee and expensive raw materials.

Jnaneswar Sen, marketing vice-president for Honda Siel Cars, told TOI that the rupee depreciation has impacted the company

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I also thinking on the same lines , Also saw this ,

"The slowdown in sales has also forced the company to go slow on its upcoming second plant in Rajasthan where it has decided to delay production of cars from the earlier-scheduled 2009 to 2010."

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I also thinking on the same lines ' date=' Also saw this ,

"The slowdown in sales has also forced the company to go slow on its upcoming second plant in Rajasthan where it has decided to delay production of cars from the earlier-scheduled 2009 to 2010."[/quote']

yeah heard that co. is delaying to schedule its rajasthan plant....

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The weakening rupee has forced the company to increase its hike the car prices. Recently even the car components have become expensive. Honda is increasing the price tags of its car models and may face an even more tough time. As it is car sales are down, the increase in prices will further affect the declining car sales.

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Again reiterating words from CEO:

MADURAI: Finding it difficult to keep the prices of its cars at the present level Honda Siel Cars India Ltd may have to hike it by one or two per

cent by January, due to rising input costs, company President and CEO Masahiro said.

Talking to reporters after inaugurating the state-of-the-art Honda facility here, he said though oil prices had fallen, input costs had increased as the value of the Rupee had come down.

"We will not be able to manage the pressure after December," Takedagawa said.

The price of Honda New City would stay as it is, but that of the Honda CRV could go up by six to seven per cent as it is a fully imported car, he said.

The company is preparing itself to face the economic slowdown. "We can't be optimistic. We are preparing ourselves in the next two years .. the situation may worsen," he said and added that as far as India is concerned, the fundamentals are strong and "there are sufficient foreign currency reserves."

The Indian versions of Accord and Civic had facilities not available elsewhere in the world, like higher suspensions, rear seat audio control and air conditioning facilities, he said.

The market would grow in future he said noting and added that the company's motorcycle sales in India was also encouraging, about six lakh bikes had been sold so far.

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@ speed and archit

 

This is not a foolish or a worst step. The company has no other option. Even if the company plans not to keep a huge profit margin, it still has to cope up with the increased cost of production.

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During this time of recession, i definately think its not a good time to buy a car!

When the demand goes down, Supply will definately get affected inturn making these imported car companies think about the ways to sell their cars!!

Its just a passing phase and patient buyers would definately reap greater benifits!!

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@ speed and archit

 This is not a foolish or a worst step. The company has no other option. Even if the company plans not to keep a huge profit margin' date=' it still has to cope up with the increased cost of production.
[/quote']

 

Still this will impact already fledging sales & goes against FM's suggestions to cut costs in order to face recession effectively.

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Honda is a very profitable company, atleast in India. Even it's CEO has prided himself of the quality of business of Honda- plainspeak means they make more profit on every car sold than most of it's compatriot's. All it's products are priced atleast 15-20% higher than the competition. SX4 has shown that Maruti can take the fight to Honda with a well thought out and sensibly priced product. Remains to be seen how the new City fare's with its high price and lack of features. With no diesel option the CR-V is facing the heat from the Captiva. The move <price hike> is plain 'audacious' given the economic crisis and lack of diesel option.

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1. The more the hike in Civic, the more VFM the Altis becomes. Even if Altis has a hike it would still be cheaper than Civic. Civic is already selling below 500 units per month . They need to re launch the Civic S version to take on the Altis. with huge diff in price between Civic E & Civic V i think customers would prefer saving some money and go for Altis in this time of recession.

2. They cant think of increasing price of New City in near future. Its already over a lac compared to Competition like SX4, Fiesta S which do give similar & extra features which New City doesnt( Auto Climate control & Alloys in SX4).

3. CR- V sales could see more downtrend with such huge price hike. Outlander & Captiva might murder it. Since Toyota Fortuner is also on the way. Expect more dent in sales.

I understand that the dollar rise is pinching them since they importing most parts for these cars. Price increase might not be the best option for them.

A company like Maruti , Hyundai hiking price is ok since they sell in volumes .

Honda has to be careful here. ( P.S. Hyundai has cut prices by around 20k today)

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1. The more the hike in Civic' date=' the more VFM the Altis becomes. Even if Altis has a hike it would still be cheaper than Civic. Civic is already selling below 500 units per month . They need to re launch the Civic S version to take on the Altis. with huge diff in price between Civic E & Civic V i think customers would prefer saving some money and go for Altis in this time of recession.

2. They cant think of increasing price of New City in near future. Its already over a lac compared to Competition like SX4, Fiesta S which do give similar & extra features which New City doesnt( Auto Climate control & Alloys in SX4).

3. CR- V sales could see more downtrend with such huge price hike. Outlander & Captiva might murder it. Since Toyota Fortuner is also on the way. Expect more dent in sales.

I understand that the dollar rise is pinching them since they importing most parts for these cars. Price increase might not be the best option for them.
A company like Maruti , Hyundai hiking price is ok since they sell in volumes .
Honda has to be careful here. ( P.S. Hyundai has cut prices by around 20k today)
[/quote']

 

With all other companies slashing prices, Honda is increasing prices which means Honda is gonna be in trouble soon for the 3 points you have stated.

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All other companies are offering hefty discounts so why should Honda increase the prices. Depreciating rupee has hit equally every car company but it seems Honda is prepared to reduce its profit one bit.

 

If they increase the price, public should boycott their products. Already the company and their dealers are too pompous.

 

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I dont think Honda is in deep sh** , they just now came up with big plant in Detroit when all the US carmakers are going to fed for bail out. Its just a precautionary measures. Every one knows that the the price money in F1 is peanuts comapared to cost of running. The teams are there only for brand image.

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@csnana: I think all auto co's are deep sh*t, in these trying times. Depend's on how deep that's all. When I suggested GM may go bankrupt some week's ago, there were many who refuted, saying is a big co's with deep pocket's...now they are asking for a bailout. When liquidity/credit dries up it's mainly the car co's that face the music, and also the realestate player's. Honda and Toyota may just be 6 month's away from the situation, they can't be totally insular to the economic downturn. Basically, you simply can't go on with employee pricing and 0% credit for long, then how are you going to pay the guy's who slog under you. In the cut throat competition in the US, profitability has taken a huge hit, in fact co's are bleeding cash with every car sold.

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