How Honda got it terribly wrong

Recently I had the experience of selling my Honda City Zx Gxi. Selling the car through the Honda dealer was one of the options I was exploring. However, this option turned out to be the worst experience in the four days it took me to sell the car. The Honda dealer sent over a supposed expert to check out the car. The gentleman proceeded to thoroughly check the car, to the extent of pulling out and putting back all the beadings on the doors and frames. After his thorough check-up he offered a buying price of 220000. Of course, I told him where he could park that figure and stopped negotiations. He left after assuring me that I would not get a better price than that. Liar!

Two days later a user car dealer checked my car and his first words on returning from the test drive were, “What a beautiful car! Why are you selling it?” We settled on 300000 for a car that the official Honda dealer said would not fetch more than 220000.

This is a classic example of car dealers in India not understanding the harm they do to their own business through bad business practices. Let’s break up the two transactions.

The Honda dealer spent over and hour checking stuff that is easily fixed if you have your own workshop, without giving due credit to the fact that the important aspects of the car like the engine, gears and clutch were in perfect condition. The user car dealer didn’t both with the aesthetics and concentrated on the parts that cannot be repaired and saw to it that they were good.

The Honda dealer ensured that I would not consider Honda ever again while the used car dealer through his positive attitude ensured that he built a relationship with me.

The Honda dealer was being shortsighted by trying to make a larger buck didn’t realize that he was devaluing the very car he sold as his main business. One of the major considerations when buying a car is how well the price of the car holds up over the years. By devaluing their own car, Honda is ensuring that the next time a person thinks of a car, Honda will not be the first option.

Maruti is an example of a company that works in the other way and when buying back their cars, they always give the seller a good deal ensuring that their cars hold value over the years. Honda needs to take a leaf out of Maruti’s book and learn how to handle the Indian market.


One Comment Add yours

  1. Great insight Vinay….

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