Is There a Concept Like Relative Pricing??

[madaneeraj]

Everytime I see some specific cars which make me wonder,

• If the car is priced correctly?
• Doesn't it the same car which I found overpriced couple of month ago, and now tempted to buy it at the same price!!
• How come there is a reduction in price, with a waiting period of 3 months, make me believe the cuts are not to clear inventory!!!
• And finally, who will buy this???

There was a concept in pricing we used to hear as "Fair Pricing" - goes like I will have X% of the profit, here is my break even and blah, blah
and now there is other concept, I think this car can fetch me 8 Lac, so lets go and sell it. Anyways price correction could be done anytime.

Let's try to evaluate some of the cars and their pricing-

Honda Jazz & I20 and to an extent Fabia
I20, Petrol with 1.2 engine, around 7 lac ex showroom. Oops to pricey. I10 seemed a better option with similar engine. But wait, here comes Jazz, 8.36 Lac ex showroom for a hatch. Hatch with H, but without wings

But take a moment to think changed dynamics! I20 now becomes a steal in comparison to Jazz, same 1.2 engine, 5 star safety Hyundai reliability, what more can you ask? I20 picked up the numbers but Jazz remained the dud. Not to mention, the pioneer in luxury hatchback category Fabia.
Well Fabia never got it's due share because nobody noticed it exists at that price. Coupled with high cost of spare parts, Skoda's indifferent attitude, numbers didn't picked up.

Jazz & Fabia never picked the numbers even after price cut. Any thoughts why??

Here is my take- Car has good chance to pick up sales right at inception, reason- You get the maximum stares and identity with a newly launched car, which most of us enjoy. People notices you on road. Rest of the volume is driven by followers and car writes a success story. But once you loose that first move advantage you do not have pioneers to carry your flag and so do the followers (which bring maximum volume) does not exists. Even though 8 out of 10 people will like Jazz drive, only 2 out of those 8 will go for Jazz.

New Ford Fiesta, Old Fiesta and New Verna
Not much to say here but old Fiesta does look much more attractive in comparison to New Fiesta. Numbers speak! sale of old fiesta classic has increased by around 20-30% (ref-October car sales) while the new unit remains a dud. And who can shell more Verna has every option available between 6 to 12

Note: Starting first thread on the forum, moderators please post or merge if something similar exists elsewhere in the forum.

 

[dodge_v1per]

Re: Is there a concept like relative pricing???

good analysis man.. both car you mention jazz & fabia are top seller now!!

 

[madaneeraj]

Bestsellers, Jazz and Fabia , Have a look at the comparison. Both Jazz and Fabia together are not even to sell 25% of numbers done by mighty I20.


Jazz I20 Fabia

July 361 5627 1461

Aug- 600 5374 1108

Sep 596 6834 1172

Oct 463 7019 1400

To add further, I20 used to have monthly figures of around 3000, early 2010.
Come Aug 2010, after Honda Jazz launch, sales started hitting around 8000, with Jazz doing 500 odd numbers.
Even initial sales projection of I20 were in the range of 1000-1500.
Regards,

 

[dodge_v1per]

i mean jazz selling great now and got long wait list after price cut suddenly!!

 

[madaneeraj]

i mean jazz selling great now and got long wait list after price cut suddenly!!

Yes I agree that car has has become far more lucrative, but cannot be said about sales figures, as presently Honda is struggling with Thailand floods. Hinda were able to sold 1982 cars in Nov with 400 odd Jazz. I read somewhere that they will be focussing on Brio, with Jazz taking second seat, as long as capacity reaches 100%. Lets see how things move forward.

 

[basis]

Jazz is much better than i20 .....Fab 1.6 is good but high TCO

 

[madaneeraj]

Jazz is much better than i20 .....Fab 1.6 is good but high TCO

YES! indeed Jazz could be considered as a landmark in hatch backs. A permier car which has/had the ability to change the perception that hatch back could not be luxorious. Ironically outdone by price price is still looking to gain foothold in Indian Car market.

Lets see the effect of price cuts once supplies become normal for Honda. I personally feel that at current price it would be having far more takers.

But i would say it becomes difficult to sell car to masses until you have some first mover pioneers which car seriously lack. I mean didn't have so much numbers floating around in cities to give confidence to safe buyers. And this generally happens when car fail to generate numbers at the launch.