honda cutting prices overseas

Been watching this news for the past week, hoping a little more would come out. Didn’t happen. So off we go:

To attract new and younger consumers, Honda will cut the prices of 45 models over the next three years in Japan. Prices are expected to drop from 10 to 30 percent, effectively selling bikes for the same prices they sold for a decade ago. The new prices will go into effect for each model when it receives an “update.”

It seems the updates will be more parts from facilities in other Asian countries where costs are lower. Last month, Honda announced that two plants in Vietnam will increase motorcycle production by 500,000 units to a total of 2 million units per year. Honda will also reduce the time spent on developing a new model to 1.5 years from the current two year window.

For example, the 250cc Honda Forza (once sold in the US as the CN250) will see a decrease of 120,000 yen ($1,350). That’s about 17% less from this year’s price of 770,000 yen ($8,650).

8,700 bucks? That’s a lot for a scooter. No wonder they’re cutting prices.

With a 48% market share in Japan, and with the overall Japanese motorcycle market dropping 27% in 2009 from 2008, Honda’s announcement will put the screws on its competitors to cut their prices.

I was hoping to find if there would be any info regarding this kind of price slashing in the States, but figure Honda is going to see what happens with their experiment in Japan before making any moves here, considering last year Honda sold 400,000 fewer bikes in the US than they had as recently as 2007. That’s more than 25% off in two years. Not as bad as sale percentages in Japan, but not good considering Honda sold about 480,000 bikes at home in 2008, and 1.3 million in the States. I guarantee they want to sell half a million more bikes in America more than they want to sell 100,000 more in Japan.

Regardless of the possibility of purchasing a new 1300 for ten grand in 2012, I suspect that smaller bikes and scooters will be Honda’s focus overseas, where that type of transportation is considered standard, not recreational.

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