Honda - SWOT Analysis
...rpm, making it an ideal car for city driving. Honda is pitching heavily on the aspect of fuel efficiency for selling the new City. It claims that the car is at least 40 per cent more fuel efficient than the previous version. It is perhaps the first time in the Indian automobile industry that a successful model has been phased out to pave the way for the new version. The company has forayed into C segment (midsize) and D segment (luxury), serving the target customer who wants to upgrade from the B segment (compact) to C segment cars and D segment car owners who look for an additional car. Marketing Strategy Honda SIEL believes there is no need for a repositioning of the car, either in terms of price or in terms of marketing. The effort is to market the car direct to the customer than use a mass media. With a proven engine, a good brand reputation and strong performance, Honda SIEL is confident to notch up volumes and move to satisfactory levels. Auto Terrace - "Drive in with a four-wheeler and drive out with a four-wheeler of your choice or a new Honda City. The choice is yours." This is the concept of Auto Terrace being actively promoted by Honda SIEL to improve its sales. According to the Honda SIEL though the concept is very much similar to the True Value concept of Maruti, the USP is to provide the customers with a vehicle of customer’s choice, it can be a Maruti or a Hyundai and not necessarily a Honda - City, Accord or CR-V. This is a strategic decision so as to not only attract the C-segment customers but also the B-segment customers who want change. About 40 per cent of sales is expected to come in through the Auto Terrace. Auto Terrace is available nationally through the company's 40 odd exclusive Honda outlets across the country. New Launches – Honda SIEL is aggressive in launching new products and updating its portfolio in quick succession, something that has been thought inconceivable in the Indian market. On the back it, the three models launched by the company during the last financial year generated encouraging response from the customers, with the company establishing its leadership in the luxury segment and increasing its market share in the premium segment. Honda SIEL sells for the product line it offers and that it delievers what customers don’t anticipate and are taken by surreal experience. The FY04 ended with an impressive sales growth of 63.1%. The company sold a total of 21,703 vehicles as against 13,300 units sold during the previous financial year. In March 2004, the company sold 3,218 units, recording a jump of 63.5% over the corresponding month last year. Competitor Analysis No less than 15 vehicle makers, including the world's biggest, already are - or soon will be - fighting for a share of India's petite and increasingly cutthroat car market. Most are betting on the come, captivated by the automotive sales potential in a country of more than 960 million people, second in the world only to China in population. Although poverty remains pervasive and per capita income is still less than $400 a year, the world's car producers are mesmerized by an emerging middle class, loosely defined yet tantalizing. India is bound to be one of the world's biggest vehicle markets in the future. The market being extremely price-sensitive with the big demand for economy cars. Segments The Indian passenger car market is divided into the following segments – A Segment – Entry level cars Players – MUL, monopoly driver. M800 and Alto. B Segment – Price bracket Rs 2.5 ~ 5.0 Lacs. Players – Tata, MUL, Hyundai, Fiat, GM, HM C Segment – Price bracket Rs. 5.0 ~ 8.0 Lacs Players – Mahindra, MUL, Hyundai, Mitsubishi, Honda SIEL, Tata, Ford, GM, Toyota, Fiat D Segment > 8 Lacs Players –GM, Toyota, Mitsubishi, Honda SIEL, Hyundai, Tata, MUL, Nissan, Skoda, Ford, Mercedes, BMW Competition from Cars Competition from SUVs Segment C / Between C & D Segment C / Between C & D Hyundai Accent Toyota Qualis Chevrolet Optra GM Chevrolet Tavera Maruti Baleno Mahindra Scorpio Mitsubishi Lancer Tata Safari Segment D Segment D Hyundai Elantra Chevrolet Forester Hyundai Sonata Ford Endeavor Skoda Octavia Hyundai Terracan Toyota Camry Nissan X Trail The CSI study measures the satisfaction of new-vehicle buyers with the dealership service experience at 12 to 18 months of ownership. Owners representing 11 makes and 27 vehicle models are covered in the 2004 study, which was fielded from June to August 2004. The study, which measures new-vehicle quality in the first two to six months of ownership, quantifies problems experienced in nine IQS categories: ride/handling/braking; features/controls; seats; heating, ventilation and cooling (HVAC); sound system; exterior; interior; engine; and transmission. The study measures owner delight with the design, content, layout and performance of new vehicles across eight specific categories during the first two to six months of ownership. The categories are: engine/transmission; ride, handling and braking; comfort/convenience; seats; cockpit/instrument panel; heating, ventilation and cooling; sound system; and styling/exterior. SWOT Analysis of Honda City Strengths - 1. World leader in gasoline engine technology In India, decent fuel efficiency has always been of paramount importance and performance has generally been compromised to achieve it. Although Honda SIEL has recalibrated the engine management system of the new City in response to customers grumbling about the abysmal fuel efficiency, but this tweak hasn’t blunted the City’s throttle response in respect to respectable fuel economy it has gained. 2. Exceptional product quality and emphasis on safety The car has already bagged prestigious automobile awards in the country (BS Motoring , AutoCar India-CNBC and ICICI-Overdrive awards) and topped the Total Customer Satisfaction Study (TCS) conducted by NFO Automotive. The City's neck shock mitigation seats, collapsible bonnet hinge and impact absorbing body structure, are some of the safety features introduced. 3. High brand recall Honda is an undisputed leader in unaided brand recall. This gives Honda a distinct competitive advantage in brand space as it has the first chance of evaluation for purchase in the specific segment. 4. Technology Savvy Honda has a...