Snapshot: Buoyed by the value pricing success of the Amaze compact sedan, Honda Cars India could junk its “premium pricing” strategy for value pricing in case of the 2014 City sedan. To arrive at a cracker of a price tag for the 2014 City, heavy localization levels will be key.
When the going gets tough, the value pricing card always works as car buyers seek out additional value from every rupee they spend. Value pricing involves delivering a slew of features at a competitive price tag rather than asking for a premium due to invisible product attributes such as longevity and higher quality levels.
While Honda Cars India stuck to the “premium pricing” strategy for its previous car models such as the previous generation City sedan and Jazz hatchback, by pricing these cars at a premium over those sold by the competition, the car maker adopted the value pricing tag with the Amaze compact sedan.
With the Amaze’s pricing, Honda undercut the Maruti Swift Dzire’s pricing, giving the Japanese car maker a solid, runaway hit at the hustings. A high amount of localization allowed Honda to price the Amaze very competitively. A similar strategy could be in place for Honda’s upcoming 2014 City sedan, due to be launched on the 7th of January.
With Honda already offering a diesel engine option in the form of the 1.5 liter i-DTEC turbo diesel engine on the 2014 City sedan, a value pricing strategy will only serve to bolster the Japanese car maker’s bid to re-take leadership position in India’s C-Segment sedan market, a position that it lost to the Hyundai Verna Fluidic a couple of years ago.
If Honda adopts a value pricing strategy for the 2014 City, expect this strategy to continue with the car maker’s other major launches of this year: the 2014 7 seat Mobilio MPV and the Jazz B+ segment hatchback. The Mobilio will be launched by the middle of the year with the Jazz lined up for a launch during the year-end.