RM 84,980 for 1.5S
RM 89,980 for 1.5E
I find the model naming convention rather odd. I would immediately associate S to be the higher grade (S for sporty, E for economy?) but Honda believes in the reverse. Maybe it's just me. More info at Motor Trader Malaysia, terato.com. Launch event video can also be found at CBT
In response to the City's introduction, UMW Toyota have introduced a new White paint, which is the rage nowadays. Also it has a basic specs 1.5J version with a manual transmission, targetted at the younger buyers / those looking for a non-national Proton / Perodua badged car alternative. As a company product, Vios has a wider appeal and is a more "durable" product to weather a slow market, with 5 models covering a wide price range from RM69k to RM88k. In contrast, the City is targetted at a narrow RM5k price band, from RM85k to RM89k. I hope they have more variants (i.e. manual transmission / basic specs) that will be introduced later into the model life to expand the City's appeal. Because for now this clearly looks like a poorly thought out product strategy with only 2 model grades. With the current gloomy economic climate, now is not the time to talk about image. You don't sell enough cars your factory shuts down and dealers go bust. It's that simple.
Below is an earlier write up made prior to the launch.
Honda Malaysia Sdn. Bhd. (HMSB) will be launching the third generation City today. It is unclear however if the new City is available for viewing in showrooms nationwide starting from today.
Looking at the price positioning in Thailand and Singapore, expect to pay a significantly higher price premium over the competing Toyota Vios. But for the extra cash you will be getting a 5-speed automatic transmission, steering wheel mounted paddle shift transmission for the top end model, class leading 506-litre (methodology unknown) boot space, an interior which is said to be bigger than a Civic, slightly more powerful engine, steering wheel which adjusts for both reach and rake and of course the most important factor to many yuppies and wanabes that populate the B-segment sedan market - a far better looking car than the Vios.
Based on reviews in Thailand and Singapore, areas of concern for the City include nasty hard plastics in the interior, rough sounding engine, and a steeply raked A-pillar which looks good but compromises the driver's view and entry. Take a look at the center console area, the fake metallic surrounds are so shiny (and large!) you can even see your own reflection! Also, some reviewers have mentioned that it is difficult to get an ideal driving position, due to the mentioned A-pillar issue and higher placed seats (possibly related to the City's Global Small Car platform centrally located fuel tank or the lowered roof line). It is best to try out the actual car for yourself and see if you can accept these minor "problems." After all, no car is perfect. Not even a Veyron. The Vios has its own issues as well - the same nasty hard plastics, noisy and rough sounding engine (the two new models seem to suffer from a noisier engine than the previous models despite using the same engine block, very odd). I personally find the seats unsupportive and steering to be extremely dead on feel but others might find them acceptable. Vios interior is clearly more crammed and the manual transmission version has some of the worst clutch feel I have tested in recent time.
Honda's Ayutthaya plant in Thailand is the "global production hub" or as Honda calls it "leader plant" for the City. Honda expects the Autthaya plant to manufacture 35,000 units of the City over the next year. 24,000 of these will exported to markets across Asia, Africa, Middle-East, Europe, Australia. Even the Japanese domestic market City (Fit Aria) is exported from Thailand. For the Malaysian market however, the City will be assembled at Honda's plant in Pegoh, Melaka.
And by the way, about the increases in price - every car manufacturer faces this problem. Whenever a new car is launched and prices are higher, some, especially the lesser educated ones, will start accusing car companies of being greedy, cheating, etc etc. These people seem to think that car prices are set in the same way the price of a plate of char kuay teow or a loaf of bread is set. Toyota and Perodua have launched the most replacement models over the last 2 years and they have been at the receiving end of such critics, particularly on Viva, Vios and Corolla.
Truth is commodity prices including steel and fuel have been skyrocketing. The current reduction in steel and fuel prices are only temporary, partly due to the credit crisis. Some number crunchers are even suggesting that the current low fuel prices are only a prelude to a coming "super-spike" in fuel prices. Not much is still being done to curb speculation of crude oil by commodity traders, and not enough is done to reduce our dependence on fossil fuel. It takes about about 18 - 24 months to develop a new car, and this is excluding the underlying marketing and product planning job of setting the vehicle's design direction, product concept and identifying target customers. The City was developed at a very challenging time, at least from the cost point of view. Their pull out from F1 and cancellation of the supercar NSX replacement project should be an indication of how urgent the situation is. I am quite sure a lot of cost cutting have been done in areas hidden away from the naked eye, i.e. wire harness, electronic modules, production control, etc. Greedy maybe a term used for American car companies run by fat cat CEOs who cash in massive bonus payouts despite driving their companies close to bankruptcy. The same however does not apply to the more prudent Japanese companies, whose leaders tend to be less flamboyant or over compensate themselves in relation to their staffs.
Currency fluctuation is another issue. In Australia, car prices will be increased by all major car makers from Holden and Ford to Toyota and Mazda begining 1-Jan 2009, mainly due to currency exchange issues. In the age of global supply chain sourcing, no one single car is built completely in one country. Parts may come from as far away as China and India or Japan. Fluctuations in US dollars, Japanese Yen and Thai bhat have an impact even on cars that are assembled locally. For reasons far beyond the scope of this blog and area of expertise of this blogger, do expect further increase in prices of many more new models.
This however brings some good news to owners of the current City. With increase in prices, expect to fetch better resale value for your current City. Residual values of cars are usually pulled up by higher prices of a new replacement model. For many families looking for a reliable, affordable decent family sedan, the previous (second generation) City is an obvious choice against the Vios, with its larger interior and boot space and amazing number of storage bins count. By the way, if you are looking for large interior space in a sub RM90k B-segment sedan - give the Latio a thought. The Nissan has what I think the largest interior size in its class. I find the cabin to be the best to sit in (not drive) too, if you ignore the horrible fabric pattern. Somehow family run local Nissan distributor Edaran Tan Chong Motor is not marketing the car the right way and the Latio is left picking up whatever "sales crumbs" left over between the City and Vios.
Related link
Honda City Price
Honda City First Impression - Thailand
Honda City Thailand launch
Honda City unmasked
3 comments:
S for Saving? E for Expensive?..haha..
Not an auto expert - just wondering wouldn't it be more expensive (both CAPEX and OPEX) to create multiple market entries of a car model? I'm imagining the entire production->sales process is more expensive due to the move from standardization->customization. e.g. Installations and production will have to consider different variants of cars, Procurement/parts sourcing will be tougher to manage, Finance has to anticipate & forecast the demands for variant models, Marketing will have to figure out how to differentiate it's products, Less standardization means more warranty headaches.
Understood that there needs to be a balance between the number of choices vs sales figures. I'm guessing Honda is going a bit conservative here?
A reckless optimist will be Proton. Creating so many models (Persona, Gen2, Savy, Saga, Waja) and variants (A-Line, B-Line, Manual, Basic, etc) that can't even cover their balance sheets. In the longer term, they're going to have trouble evergreening their models.
Kenny
You made a good point.
Not an expert myself, but a lot of other factors are involved. Chief among them I think is product maturity. The more mature a product line is, the more familiar production guys are at assembling it and sales team are more confident of handling additional models.
But the bottom line is, you need to chase the volume to stay in business. Of course with more models / variants, managing the product will be more complicated. If car companies have their way, all cars will have only one single specs, one price and even one colour. But of course that can't happen.
It is interesting to note that both Toyota and Honda have very different new model introduction policies. Conservative Toyota usually sells their overseas models after their domestic model equivalents have been released in Japan, with all early model issues ironed out nearer to their HQ. The Belta, from which the Vios is based have been on sale in Japan for almost 6 months before being introduced overseas.
Honda however prefers to do simultaneous launches, very close to its global introduction timing.
As the City model matures, I do hope more variants are being introduced. It's a great car and the limited price range is hampering growth. I am sure there are many who loved the car's looks but can't afford it just yet.
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