The Reason Why Honda Is Giving Hefty Discounts – Localization

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If you have wondering how come a company like Honda, known for its premium positioning has suddenly come with such massive discounts, you will have two ways to look at it. One of course is the fact that the competition, in the past couple of years has escalated to unprecedented levels. Now with the lack of a diesel options, and high prices, the cars won’t move out of the dealerships without discounts.

The second reason, according to Honda is the increased localization. The company has gone on record to say that the reason behind the slashed prices is local manufacturing of components.

Honda’s Senior VP Sales and Marketing, Inaneswar Sen says “Our R&D function in India started working on localization and cost down activities for our volume models from 2009. In anticipation of bigger volumes resulting in economies of scale from the second half of the current year, we have achieved considerable cost reduction and are happy to pass on the benefit to the customers with immediate effect”

As Honda also plans to introduce the new facelift Jazz it has introduced heavy discount on the current model by up to Rs 1, 75,000 at the dealership level. Honda will enter the mass market by introducing the Brio. To keep the prices low of the Brio low, Honda will have to stress more on localization of the components. Though Honda has already started losing its market to other rivals as they offer a diesel variant it is trying hard to lure the buyers by giving away discounts.

However, no amount of discount will lure in the buyer who is looking for a diesel engine in his car, especially in these times when there is a ridiculous difference between the prices of petrol and diesel fuels. We hope Honda introduces a wide variety of diesel engines soon enough to power cars across its model range.

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