Wizard
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| How do you know they will be able to bring it over for the same amount of money, just because they did it in the past? |
Not just because they have done it in the past, but also because they are doing it right now. Let us see…
3.8m Yen in Japan, $34K in the USA (S2000 - Imported)
5.4m Yen in Japan, $50K in the USA (RL - Imported)
2.4m Yen in Japan, $21K in the USA (CRV – Imported*)
2.4m Yen in Japan, $22K in the USA (Civic Hybrid – Imported)
If Honda were selling the JDM Odyssey here (2.3m Yen to 3.0m Yen), I can see it as being a $20K-$28K vehicle. So tell me again, why would a 2.8m Yen vehicle in Japan cost “at least” $30-32K in the USA?
| Many market dynamics have changed since then. How about emmissions and safety requirements? Those are all more stringent and thus more expensive. |
They are included in the cost of every vehicle mentioned above, and the rest of the world. Do you think K20 in Civic Si doesn’t have that cost over B18C used in Integra GS-R? Yet, with more features, and more power and while being much safer car, it is actually cheaper. Isn’t it?
| A 4 door Si with nav retails within $1,000 of where ITR was 7 years ago. How are they going to bring the Type R, and sell it for the same price as a 4 door Si with navi? |
There is nothing like adding a luxury feature that costs almost 10% of the cost of car, to make a point on “value”. If Honda could sell ITR for $2K over GS-R, I see no reason why Honda couldn’t sell CTR over Si for $4K premium. But hey, they are selling Mugen Si for $8K premium… times have really changed. It must be impossible for Honda to consider CTR unless they can charge $32K for it, right?
| But it wouldn't have tested the same thing. A 4cylinder hybrid MIGHT have been as fast as a standard V6, but considering the difference in times, I doubt it. So that basically leaves them selling a car just like everyone else's economy minded hybrids. |
If hybrid/I-4 performed better than non-hybrid/I-4, while consuming less gas, a point would have been made. Toyota is doing that. That is why I question Honda and the steps it takes at times. Another great example is 6MT on V6 models. Why does Honda force people to buy the top end model if they wanted 6MT? Similar mistakes led to creation of an RL with fake wood for the first time. You may not question Honda, but I hate to see these dumb moves from a company that I admire for good reasons.
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owequitit
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Wizard wrote:
| Maybe the problem is Mugen, and not Honda I don't know. But I am willing to bet they aren't making nearly as much money as you think they are. |
- Mugen isn't selling Mugen Si, Honda is. If Walmart decided to sell $200/bottle wine, the winery wouldn't be the problem.
- Its not about whether they make or lose money as much it is about Honda's priorities when it comes selling performance. And that bothers me.
| Bringing a Mugen Si and a Type R are wholely different. 1) The Type R has to be modified to meet US Federal regulations which are not the same as Japanese Federal regulations. These modifications cost money. How about powertrain certification costs? That version of the K20 is not currently sold here. |
- Mugen Si has tweaks to it, why wouldn't it require certifications?
- Honda didn't sell the J30 used in Accord Hybrid (which is really the J30 from Inspire) until that car arrived. Perhaps we shouldn't say that the $3K premium on hybrid is all due to the hybrid system and VCM. How much does it cost to certify anyway? Thousands per car?
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You are missing my point on Mugen entirely.
Yes, Honda is selling the Mugen Si. But the parts are sourced from Mugen. So Mugen IS a key player in the equation. If you know anything about Mugen, you know that their stuff is spendy. Even if Honda gets it at a discount, it is still likely to cost a sum that most people would find to be too high. That is why I suspect Mugen might be part of the problem. Their stuff is expensive, and may be sold to Honda at a price that results in a $30K Si. That is why I suspect the Mugen name is part of the problem. Performance wise there are probably a few advantages over an HFP Si, but realistically, it is a similar package for 2X the price. Common sense would dictate there is a good chance it is related to the parts. The lack of dealer installation probably has something to do with it to.
As far as certification goes, yes, I have said that all along. I am not real familiar with the motor vehicle cert requirements, but I can tell you from an aviation standpoint, that it can be as simple as doing some paperwork for something minor, to a full fledged test and statistical analysis effort.
Usually, a brand new model is the most intensive effort (obviously) and it basically goes down from there. For instance, a major structural change requires that the changes demonstrate the same standards of performance, as well as the overall package perform to the same set of standards.
I don't know from an OEM perspective, but I would imagine it is similar. So a car like the Mugen Si, might require some additional paperwork, since everything is primarily cosmetic, thus keeping the cost a little lower. My guess with the CTR, is that they would 1) have to be modified to fit US Federal Regulations. 2) They would have to certify the powertrain, etc, but for the most part, it would use existing Civic certifications, since it is primarily based on the same car. That is one reason in aviation, you will see companies continually refine a design, as opposed to replace it outright, because the cost is substantially less, because you can typically pick up where you left off. Not the case with a clean sheet design. They also like to rely on proven technology in aviation.
As far as cost of certification, I can't say exactly what it is, because I haven't done it. I doubt that Honda would willingly provide information on cost for something like that. But I do know that while probably not as intensive as aviation, there is still a slew of paperwork that needs to be done, and in the case of a substantially modified powertrain, chassis, etc, a lot of testing. Like I said, Honda can't just slap a body kit on a car and call it a day. It is probably nowhere near a new model's cost and complexity, but it would be substantially moreso, if they were to substantially alter the powertrain.
That is why with a lot of lower volume boutique cars, they will typically set it up to use and existing certified powertrain. The Ariel Atom comes to mind. In Europe, they used a supercharged CTR motor from the last gen hatchback. In the states, they use the Supercharged ECOTEC from the Cobalt SS, because it allowed them to avoid that portion of the process, since most of the work would already have been done.
You also have to keep in mind that volume plays a huge role in per unit cost. With 1,000 units, it is going to be several orders of magnituded higher than if it is 300,000 units. By using the stock Civic powertrain, they are still spreading the cost of that aspect over 350K someodd units, which helps keep costs low.
Then you figure Honda also has to warranty anything that is on that car in the showroom. So if they use aftermarket parts, they now have to honor other companies parts, or they have to develop their own. If they develop their own, then they have that cost as well. Another reason they probably wanted to avoid that. If you buy a Civic Si and make it into an exact replica of the Mugen Si, Honda doesn't have to warrant anything they didn't put on the car, AND they don't have to warrant anything that breaks as a direct result of those parts. So if they put a bunch of stuff on the engine, they are responsible, you aren't. If they don't put it on, they aren't responsible. It would be a major consideration from Honda's perspective when releasing a car like the Mugen Si.
If I had to guess, I would say the vast majority of the $8K premium is Mugen's cost for parts. It would cost the average Joe about $32K roughly to recreate this car using a stock Si. So even if you take a 50% discount off of that cost, to allow for markup and middlemen, you are still looking at almost $5K just in parts. Then you have all the miscellaneous costs, such as any paperwork, or certification work that needs to be done. You also have the inventory of spare parts that Honda is required to keep for at least 30 years, and you have all the other costs associated with modifying brochures, etc to promote this new model. Yes, they are incremental, but at somepoint Honda has to pass them on, if they don't want to eat the cost. With the S2000CR, they decided to eat some fo the cost, and thus are NOT making a profit on the ones that are built.
In my opinion, this car makes sense for the simple fact that a hardcore group of people would have recreated this car on their own. This package them to buy it complete, with a full warranty, and OEM quality installation, all while paying LESS than what it would have cost them to build the exact same thing. THAT is where Honda will pick up a 1,000 customers. Hell, even a cheap crappy fiberglass bodykit can easily cost 2-3K by the time it is installed, prepped, and finished.
We will use King Motorsports' prices in Wiscosin. They are the only official Mugen dealer in the US.
The wheels alone are $710 each if you were to buy them outright, without tires. There is almost $3K of your $8K right there. For the closest body mods you can buy from Mugen, you are looking at an additional $2200 for the parts UNPAINTED and UNINSTALLED. We are over $5000 now. The suspension rings in at $1100 uninstalled. The catback exhaust doesn't seem to be available from King, but based on what I have seen people buy them for in the past, it is probably about $1,000. The fact that King doesn't have it makes me wonder if Honda had to certify that little gem to sell it in the states. It probably would have just been a matter of making sure it met noise regulations, but it still would have cost a little $$. The shift knob is probably about $100. So basically, we are at $6300 if we buy everything ourselves (minus the exhaust) and we still have to have the stuff prepped and painted, and installed. Oh yeah, we still need tires too. The prep work alone is probably going to cost $800 for an OEM quality finish, and then installation is probably going to be another $500-1,000. So really, even if you could match the price of the Mugen Si yourself, you now have a car without an exhaust, AND you have no warranty on what you have installed. Throw in the exhaust, if it ever becomes available and you just spent more than what the car would have cost had you just bought Honda's, and you don't have the grill, the numbered plaque, or the collectibility of a true factory option package.
Realistically, you have to be a VERY hardcore JDM Honda head to want to pay that kind of money for those kinds of mods, but with as much as kids spend on JDM stuff, just to be authentic, I guarantee you they will sell them. I have seen regular OEM JDM headlights go for $350 for USED ones off of a car that was 17 years old. This package does not appeal to MOST consumers. But there is a hardcore group of enthusiasts that it DOES appeal to. And for that group the car makes sense. 99% of the people who buy a Honda or Acura do NOT fall into this group. Most don't even know what JDM is. If you have ever gone to an import car show, an import meet, or any number of other functions (especially in So Cal, where this "JDM" scene is biggest) you will see the enthusiasm of "appearance" packages, and you will CLEARLY see that there is a TON of interest in this segment of enthusiasts. If you don't like/understand/care for JDM, this car is NOT for you. Those people would be better off just buying a stock Si and modifying it, or getting something else.
I personally am happy to see Honda trying to accomodate ALL groups of enthusiasts, and not just the self proclaimed "true enthusiasts" that don't want much more than extra power.
Now, for the Type R.
THIS is the car for ME. I would love to see it at $25K. But a regular 4 door Si with navi is already over $23K. Considering the increased legislation since the original ITR was over here, I don't see the powertrain certification being any cheaper. And they will most likely have make changes to get it to run on 91 octane pump gas, and still meet emmissions, and not ping itself to death. I just don't see the 11.7:1 compression staying. That increases cost right there. I think they had to do that with the USDM ITR as well, but not all cases are exactly the same. Then we need a new engine program to run it. That also costs money.
It is possible they could avoid some of the potential cost fluctuation associated with importing, by building it locally, but that brings a host of other headaches that might offset the gains. They already have a trained and functional assembly line setup in Tochigi. They have the equipment, the processes, and the personel. Here they don't. So they would need to add, or modify existing facilities. They would need to train people, and they would need to get the processes working. All for a few thousand cars. I think Honda would be smarter long term to keep all Type R production in Tochigi, and change what they need to on that assembly line, to accomodate worldwide production. That allows them to minimize the per unit cost associated with manufacturing changes, because they can quickly and effectively change 1 assembly line to accomodate changing markets worldwide.
Obviously, they also have the Type R facility in Swindon England, but Europe typically snaps up Type R's as fast as they are built too because of the differences in their consumer market.
The biggest hurdle Honda would have with importing the Type R, is that the Yen has been relatively strong against the US dollar as of late. It has weakened recently, but there is no guarantee it will stay there. When the yen strengthens, they have 2 choices. Let their per unit profit margin erode to almost nothing, or mark up the price. This is the biggest reason Honda developed the strategy of producing vehicles for a market, in a market. Honda's US sales are insulated from exchange rates because US Hondas are mostly built in US dollars. So if the yen fluctuates, it doesn't matter. But a fluctuation on the yen DOES affect every single Japanese built Honda that is sold here.
In all of your price assertions, you have neglected the exchange rate. The Yen vs Dollar in 2001 has nothing to do with the yen vs Dollar in 2007. It also has nothing to do with the Yen vs the Won or any other form of currency. This same exchange rate is one of the reasons Korean companies are able to sell cars here with similar content for less money. There is more bang for the buck when the US dollar is transferred into their currency (don't remember off the top of my head).
Honda is not going to put themselves in a position, to lose money on an exchange rate. They are going to be even more hesitant to do it on a car that has a low per unit profit margin on it as is. Everybody wants a better car for the same price. The Type R is a better car for the enthusiast. It will also be more than $2K higher in my opinion. Just the HFP package is a $4k option on a regular Si, and it does not include the full suspension modifications, the interior modifications, the drivetrain modifications, the chassis modifications etc. Like I said, IN MY OPINION, a Type R would come in somewhere north of $26K. I think realistically it would be somewhere around $27-28K, with no dealer markup (which will be inevitable). Now here is where it gets intersting. If Honda wanted to bring it here for $25K, they might be able to. But it would require a higher volume, and I don't think they have the current production facilities for that. If they could sell say 20-30K Type R's per year here, they might be able to do it. But I don't know that they would want to sell that many for fear it might water down the exclusive image. That is a little less than 10% of all US Civic sales. I would guess that they are more likely to bring 5K MAYBE 10 to the US per year at the top end.
Even if they did manage to bring it here for $25K, how are they going to sell it against a 268HP MS3 for $23K. Or a 300HP SRT-4 at $25K? I can assure you that most American consumers will overlook the Type R, because it doesn't compete on paper. HP specs don't show handling balance. They don't show soul, they don't show well rounded. They show HP, weight, and acceleration. In the US, THAT is what sells cars in this category.
Rose colored hindsight has a way of skewing reality.
The ITR wasn't a phenominal seller in the showrooms. Most buyers didn't want it for the money. Every 16 year old "enthusiast" wanted one, but couldn't afford it. Those with the scratch overwhelmingly bought the GS-R. The S2K hasn't sold in phenominal numbers, yet every "enthusiast" wants one. They both do very well on the used market, but that doesn't help Honda in retail sales.
The CTR is a great car, no doubt. I would go buy in a heartbeat. But it will probably be a relatively tough sell, unless they keep the volume really low, which will drive the price up.
I think they are testing a few things with the Mugen Si. 1) If they can sell factory Mugen packages in low numbers, and 2) if people are willing to pay $30K for a Mugen Si, then they can justify that they can sell a $27-28K Type R here at a volume of 5-10K.
If you don't like/understand/desire a performance car with high revs, high noise, FWD, visceral tactile feel and balance above all else, this is not your car.
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owequitit
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Wizard wrote:
| How do you know they will be able to bring it over for the same amount of money, just because they did it in the past? |
Not just because they have done it in the past, but also because they are doing it right now. Let us see…
3.8m Yen in Japan, $34K in the USA (S2000 - Imported)
5.4m Yen in Japan, $50K in the USA (RL - Imported)
2.4m Yen in Japan, $21K in the USA (CRV – Imported*)
2.4m Yen in Japan, $22K in the USA (Civic Hybrid – Imported)
If Honda were selling the JDM Odyssey here (2.3m Yen to 3.0m Yen), I can see it as being a $20K-$28K vehicle. So tell me again, why would a 2.8m Yen vehicle in Japan cost “at least” $30-32K in the USA?
| Many market dynamics have changed since then. How about emmissions and safety requirements? Those are all more stringent and thus more expensive. |
They are included in the cost of every vehicle mentioned above, and the rest of the world. Do you think K20 in Civic Si doesn’t have that cost over B18C used in Integra GS-R? Yet, with more features, and more power and while being much safer car, it is actually cheaper. Isn’t it?
| A 4 door Si with nav retails within $1,000 of where ITR was 7 years ago. How are they going to bring the Type R, and sell it for the same price as a 4 door Si with navi? |
There is nothing like adding a luxury feature that costs almost 10% of the cost of car, to make a point on “value”. If Honda could sell ITR for $2K over GS-R, I see no reason why Honda couldn’t sell CTR over Si for $4K premium. But hey, they are selling Mugen Si for $8K premium… times have really changed. It must be impossible for Honda to consider CTR unless they can charge $32K for it, right?
| But it wouldn't have tested the same thing. A 4cylinder hybrid MIGHT have been as fast as a standard V6, but considering the difference in times, I doubt it. So that basically leaves them selling a car just like everyone else's economy minded hybrids. |
If hybrid/I-4 performed better than non-hybrid/I-4, while consuming less gas, a point would have been made. Toyota is doing that. That is why I question Honda and the steps it takes at times. Another great example is 6MT on V6 models. Why does Honda force people to buy the top end model if they wanted 6MT? Similar mistakes led to creation of an RL with fake wood for the first time. You may not question Honda, but I hate to see these dumb moves from a company that I admire for good reasons.
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On all of your first arguements, you have neglected volume. It appears that you would be well served by going to take some finance, and corporate finance classes. Of course, volume has nothing to do with it. Also, all of those cars are having their production costs ammortized out over a 5 or more year production run. If the Type R is brought here, it will most likely be 2010. That means that all additional Type R costs will have to be ammortized out, not only over a low annual volume, but also over a single year. In 8 years, the S2K has sold far, far more than the Type R will have. So will all the others. As a conservative estimate, I think Si production accounts for about 50K Civic sales. More now that the 4 door is out. So all of those costs are ammortized over more units. In this case, SIGNIFICANTLY more units. 250K vs 5-10K over the total run.
Why does the cost of something go down if you buy in bulk? You are spreading the total cost over more units, which brings the price down. The more we produce of something, the lower the per unit production costs go. They will be on a curve, that will assymptotically approach 0 as we increase volume. Look at an economics supply curve if you want to see a picture. It is the EXACT same concept.
Or conversely, why does your housepayment go down if you increase the payback period? You are ammortizing the total cost over more units, in this case payments. With a low volume, short term, limited sales case, you can't ammortize over a large numer of units. You can either jack the cost up, or you can take a hit on margins.
Using your cited example above of the import cost of other cars, it would be similar to your neighbor buying the exact same house for the exact same price you did. His loan term is 30 years, your loan term is 5. It would then be similar to you expecting the exact same house payment that he has, because the proportion you both paid is the same.
Do you see the flaw with your reasoning now? The other cars would be similar to a 30 year loan because the total volume is much greater. The Type R would be similar to a 5 year loan, because the volume is lower, and the time period is shorter.
I will bring up the S2000CR yet again. Honda has already said they will LOSE money on each and every single unit sold. Why? Because even with NO powertrain changes, the cost of development for everything else will not be made up by the revenue gained in selling the car. Period. There won't be enough units, or enough revenue to recoup the costs of the project. Even though the regular S2k has such and such exchange rate, and even though there were no powertrain mods, and even though you apparently can't understand why.
The RL is a special exception, because Honda priced it based on a planned volume that never happened. They are thus losing their ass on every single one sold.
You must be more of an engineer type. If you had any kind of financial background, this stuff would seem pretty obvious to you. That isn't an insult, just an observation. You are looking at about 2% of the reality involved in pricing a commodity and saying "in case X it worked, so it MUST also work in case Z." It isn't a math equation that balances that easily, and there are way more variables than just 1 constant of "Honda did it with this car, so they should also be able to do it with this car, and every other car!"
You just can't make an entire business case based on 1 single proportion that you decided would be fitting to measure. The basic reason is simple. You have neglected time and volume.
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Kn1ves
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It's going to be funny when 2010 comes around and theres no CTR.
The rumors about a Type-R returning has been circulating the 1st day the last ITR was sold.
I don't expect anything to change especially when Honda can just bring a Mugen Si and sell it for $8k more instead.
owequitit, everything that needs to be said has been said. You can have the last word if you want.
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Wizard
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Civic Type-R is a Civic, as much as Mugen Si. Both have different chassis tuning (lower) and both have power train changes. With either, Honda will have to ensure they meet specs for certification. Honda hasn’t had trouble getting low volume vehicles certified in Europe, or even here in the USA, so why would it be a big deal ONLY on CTR?
| If I had to guess, I would say the vast majority of the $8K premium is Mugen's cost for parts. |
It doesn’t matter what the premium is for, as long as it is there, considering that it will be rather hard to justify that kind of premium for a car equipped as such from the factory. I expect 35-40% premium on the price of stock model show up with substantial improvements. So far, that doesn’t appear to be the case. Anybody willing to shell that kind of money… well it is there money, more power to them. For me, it is about Honda and its misplaced priorities.
But there is a hardcore group of enthusiasts that it DOES appeal to.
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These enthusiasts you speak of, would they prefer Type-R over Mugen Si? Why?
| THIS is the car for ME. I would love to see it at $25K. But a regular 4 door Si with navi is already over $23K. Considering the increased legislation since the original ITR was over here, I don't see the powertrain certification being any cheaper. |
What legislation? If you’re talking about need for engines to be cleaner, it has been that way for a while. The latest generation has to be cleaner than previous and so on. GS-R had to have clean enough engine, as did ITR. They were contemporaries, hence comparable. Si has to be clean enough, it isn’t getting a free pass, is it?
Back to your fascination about including NAVI in Si’s price tag to compare CTR’s price tag, please tell me, why do you do so? Are you including NAV in CTR too? Then it will definitely not cost $25K. Not even 2000 ITR would. Stop making excuses.
| I think Honda would be smarter long term to keep all Type R production in Tochigi, and change what they need to on that assembly line, to accomodate worldwide production. |
Why would it be smarter? Its like saying Honda would be smarter keeping production of all vehicles in Japan.
| Obviously, they also have the Type R facility in Swindon England, but Europe typically snaps up Type R's as fast as they are built too because of the differences in their consumer market. |
It has been an uphill battle for Honda to gain momentum in Europe. They didn’t get there worrying about certification process. Most of the European markets are tiny, yet Honda hasn’t shut down its business from fear of certification and associated costs. Heck, for European market alone, Honda offered Civic with I-Shift transmission. 5AT for American Fit, when they could have avoided all those costs by offering CVT-7 like the rest of the world.
| The biggest hurdle Honda would have with importing the Type R, is that the Yen has been relatively strong against the US dollar as of late. It has weakened recently, but there is no guarantee it will stay there… |
This is why it makes sense for Honda to manufacture vehicles globally, to fit local needs. What do you think happens to Civic Hybrid with such fluctuations? I believe that car is imported. You seem to worry more about these fluctuations, and costs, than Honda.
In all of your price assertions, you have neglected the exchange rate. The Yen vs Dollar in 2001 has nothing to do with the yen vs Dollar in 2007.
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Unless you believe so, things don’t work that way. Fit is imported from Japan. Is its price fluctuating with the exchange rate? S2000? RL? Civic Hybrid? TSX? Accord? CR-V? How much variance have you seen in price of S2000 since 1999? It is imported from Japan, right? There, perfect example for you to “see” the reality.
| Like I said, IN MY OPINION, a Type R would come in somewhere north of $26K. I think realistically it would be somewhere around $27-28K, with no dealer markup (which will be inevitable). |
$25-26K would be more realistic, given the half dozen or so examples of imports I provided earlier. Anything more would be wishful thinking to justify Mugen Si.
| But it would require a higher volume, and I don't think they have the current production facilities for that. |
That will be a good problem to have. Honda would rather have more buyers than car to sell, than the other way around.
Even if they did manage to bring it here for $25K, how are they going to sell it against a 268HP MS3 for $23K. Or a 300HP SRT-4 at $25K? I can assure you that most American consumers will overlook the Type R, because it doesn't compete on paper.
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How did you justify Mugen Si selling for $30K? Won’t it be fun to put $30K Mugen Si and $26K CTR on a track to see which of the two Honda is a winner, before we worry about competition?
The ITR wasn't a phenominal seller in the showrooms. Most buyers didn't want it for the money.
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I’m beginning to question the priorities of enthusiasts. So, they would rather have Mugen Si, eh?
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Wizard
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owequitit wrote:
On all of your first arguements, you have neglected volume. It appears that you would be well served by going to take some finance, and corporate finance classes. |
Did your finance classes tell you that you must know the costs involved before you worry about volume and impact on the bottom line? Or, was it about pulling things out of thin air?
Honda doesn't have any trouble selling CTR in Europe, Australia, Malaysia and Japan. Somehow, its biggest market is the one that can't.
But then, you were talking about amortization of costs... what numbers did you use?
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Wizard
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Oh, and here is a perfect example of Honda's misplaced priorities...
"For your extra $4 grand you got a bunch of hardware that made the M3 ready for track day: 19-inch forged alloy wheels; stiffer shocks and springs; a quicker steering ratio (15.4:1 to 14.5:1); larger, cross-drilled front brake rotors (12.8 inches to 13.6 inches); cross-drilled rear rotors; and brake pads with a more aggressive bite. Most of all, you got big Michelin Pilot tires, 225/40ZR19s in front and ultra-wide 255/35ZR19s in the rear.
The CSL's less intrusive M Track mode for the M3's electronic stability control also proved to be a key part of the package. Actuated by a button on the steering wheel, it backed off the threshold of the stability control's intervention. Although the system didn't shut down completely, it gave you the sense of command you need in a real high-performance car.
Inside the cabin, you held a steering wheel wrapped in soft, racing-style suede, and it felt like it was worth $4 grand all by itself. The interior was also notable for what had been left out, as cruise control and audio controls mounted on the steering wheel don't have any place in a track car."
Interestingly enough, $4K at BMW is far more performance oriented in an M3 than $8K is at Honda in a Civic. Ridiculous.
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owequitit
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Wizard wrote:
owequitit wrote:
On all of your first arguements, you have neglected volume. It appears that you would be well served by going to take some finance, and corporate finance classes. |
Did your finance classes tell you that you must know the costs involved before you worry about volume and impact on the bottom line? Or, was it about pulling things out of thin air?
Honda doesn't have any trouble selling CTR in Europe, Australia, Malaysia and Japan. Somehow, its biggest market is the one that can't.
But then, you were talking about amortization of costs... what numbers did you use?
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owequitit
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Wizard wrote:
Did your finance classes tell you that you must know the costs involved before you worry about volume and impact on the bottom line? Or, was it about pulling things out of thin air?
Honda doesn't have any trouble selling CTR in Europe, Australia, Malaysia and Japan. Somehow, its biggest market is the one that can't.
But then, you were talking about amortization of costs... what numbers did you use?
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Yes they did. My statement was based on you pointing out examples with far larger prodcution volumes, and then stating they should be able to duplicate that with the Type R.
Cost is absolutely fundamental, which is why volume is also fundamental. You can't point to a car with even 20K volume per year, and then expect to duplicate the results over a few thousand at best.
What kind of profit is Honda making per CTR in the rest of the world?
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owequitit
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Wizard wrote:
Oh, and here is a perfect example of Honda's misplaced priorities...
"For your extra $4 grand you got a bunch of hardware that made the M3 ready for track day: 19-inch forged alloy wheels; stiffer shocks and springs; a quicker steering ratio (15.4:1 to 14.5:1); larger, cross-drilled front brake rotors (12.8 inches to 13.6 inches); cross-drilled rear rotors; and brake pads with a more aggressive bite. Most of all, you got big Michelin Pilot tires, 225/40ZR19s in front and ultra-wide 255/35ZR19s in the rear.
The CSL's less intrusive M Track mode for the M3's electronic stability control also proved to be a key part of the package. Actuated by a button on the steering wheel, it backed off the threshold of the stability control's intervention. Although the system didn't shut down completely, it gave you the sense of command you need in a real high-performance car.
Inside the cabin, you held a steering wheel wrapped in soft, racing-style suede, and it felt like it was worth $4 grand all by itself. The interior was also notable for what had been left out, as cruise control and audio controls mounted on the steering wheel don't have any place in a track car."
Interestingly enough, $4K at BMW is far more performance oriented in an M3 than $8K is at Honda in a Civic. Ridiculous.
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Ask yourself this: Are Honda's priorities misplace because this isn't the car that YOU want, or because it is the car that nobody wants?
Not all enthusiasts want a CTR. A fair number do, but NOT all. You would be foolish to think that everyone's priorties are in line with yours.
Perhaps there will be both, and then everyone can be happy, and this arguement can finally die. I know a lot of people that don't want the noise and ride tradeoff associated with a Type R. But they have other priorities besides total performance in a daily driver, so they must not be enthusiastic about cars.
I never said this car appealed to everyone, I have no idea what Honda's profit picture looks like, and I never said this was the answer to all enthusiast's demands. Nor did I claim to want one. I simply stated that there IS a group of people who will want this car. I know, because I have met them in person.
But since I am so clearly out of touch with everything, why don't YOU explain the JDM scene to ME.
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Wizard
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owequitit wrote:
Yes they did. My statement was based on you pointing out examples with far larger prodcution volumes, and then stating they should be able to duplicate that with the Type R.
Cost is absolutely fundamental, which is why volume is also fundamental. You can't point to a car with even 20K volume per year, and then expect to duplicate the results over a few thousand at best.
What kind of profit is Honda making per CTR in the rest of the world?
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You're the one with numbers. So, tell me. As for numbers from me, I would question how in the world Honda managed to sell Integra Type-R for $24.5K when Integra GS-R was $22.5K. What has changed so much?
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Wizard
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| Not all enthusiasts want a CTR. A fair number do, but NOT all. You would be foolish to think that everyone's priorties are in line with yours. |
The problem is that Honda thinks it is better to sell Mugen Si at $30K than it is to consider CTR. There must be a greater market for the latter, right?
| But since I am so clearly out of touch with everything, why don't YOU explain the JDM scene to ME. |
I don’t know the JDM scene, but I do know that Honda is offering CTR over there, and with Mugen Si not in sight.
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Kn1ves
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Wizard, you're wasting your breath. You need not argue over someone who clearly has no idea about the real world.
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