In a move designed to attract new, younger consumers, Honda will cut the prices of 45 models over the next three years. Prices are expected to drop from 10 to 30 percent, and will go into effect when each model receives a full or minor update.
For example, Honda’s least-expensive model, the venerable Super Cub 50 will see a 40,000 yen (US$457) price cut. The 250cc Honda Forza, the least-expensive of the company’s midsized scooter lineup, will see a decrease of 120,000 yen (US$1,371).
To compensate for the price drop, Honda plans to increase production in its facilities in other Asian countries where costs are lower. On June 29, Honda announced its two plants in Vietnam will increase motorcycle production by 500,000 units to 2 million units per year. Development costs will also be cut by reducing the time spent on developing a new model to 1.5 years from the current two year window.
With a 48% market share in Japan, Honda’s announcement will put pressure on its competitors to follow suit. The overall Japanese motorcycle market dropped 27.1% in 2009 from the previous year.
It’s not yet clear how the price reduction in Japan will affect American Honda’s prices.