Tata Nexon Expected Vs Actual — Price Reaction

Nexon Petrol — Expected vs Launch Price Comparison

As for the Nexon petrol variants, we expected it to start from Rs. 8.0 lakh, which is the same as before. The Nexon’s prices start from Rs. 8.10 lakh, which is only 1.25% off from our estimations. Despite the addition of a few new features in the base variant such as 4 extra airbags, LED headlamps and a new design, we didn’t expect the prices to deviate significantly from the old Nexon’s base price, which is Rs. 8.0 lakh. This is because the Nexon’s base model was also getting a 5-speed manual transmission. Even if a 5-speed manual transmission doesn’t save enough cost to add these features, it certainly creates a perception of value positioning and it clearly worked out as we expected.

From there, we completely relied on the brochure to calculate the incremental perceived cost of the subsequent variants. Since the next Smart Plus variant adds about Rs. 50,000 worth of perceived value, we expected it to cost another Rs. 90,000 or so. Tata usually charge a significant amount for the subsequent variants in the lower trims and it worked out exactly as we expected. The final prices of the Smart Plus variant was off by only 2.25% from our estimation.

The Pure variant also adds about Rs. 50,000 worth of perceived value over the Smart Plus (non-S) variant. Here, we expected it to add another Rs. 90,000 to the ex-showroom price. Here too, the final price deviated only by 1.02% from our estimations.

Next, the Creative variant adds about Rs. 1.0 lakh worth of features. As we move higher in the variant lineup, we have observed that Tata start leaning towards a somewhat value positioning. Thus, we expected it to add only Rs. 1.0 lakh to the Pure’s ex-showroom price. Once again, we were within a 1.85% margin of error. The Creative Plus adds about Rs. 40,000 worth of additional features, for which we expect Tata to charge another Rs. 50,000 but Tata made a fatter jump of Rs. 70,000 for this upgrade. While our Creative Plus expected prices were a little off, it was within a 5% margin of error, which we consider a passing grade.

Here on, things started  going haywire. We expected Tata to lean further towards the value side for the Fearless and its derived variants. However, we missed the mark with the Fearless and Fearless Plus (S) variants and posted a deviation of 5.93% and 8.0%, respectively. The incremental feature value addition of the Fearless variant was only about Rs. 40,000 for the Fearless trim and about Rs. 90,000 for the Fearless Plus (S) trims.

It’s worth noting that the Fearless Plus (non-S) didn’t even exist at the time of estimating the features. Moreover, the features of the various S variants changed considerably from the time we calculated the expected prices to the final price reveal. Still we managed to get passing marks (<5% deviation) in 9 out of 11 S variants in the entire Nexon lineup (petrol + diesel). This is excluding the Fearless Plus (S) variants, which was there in the brochure right from the start.

From there, it was pretty straight forward price estimation for the AMT variants as we expected them to cost Rs. 70,000 more than the comparable manual variants and there were no surprises here.

While Tata currently charge Rs. 1.10 lakh for the DCT automatic in the Altroz, we expected the Nexon DCT to cost Rs. 1.20 lakh more than the comparable manual variants. This is because the Nexon gets a new, 7-speed DCT while the Altroz gets a 6-speed DCT. Here too, the guesstimates were spot on. The reason we were fairly confident that it wouldn’t cost considerably more than Rs. 1.20 lakh is that this is a brand new transmission.

Keeping it prohibitively more expensive than the manual would limit its reach. And, Tata want to get it in as many hands as possible before making it available in the Curvv 1.2L turbo petrol followed by the Safari and Harrier 1.5L turbo petrol. The adoption will help them smooth out the niggles so that it can eventually handle more torque.

Pro Tip: If you value long-term reliability, then skip the DCT. Not only are they yet to prove their reliability in Indian driving and climatic conditions, buying a first-gen piece of technology means you are paying to be the beta tester. Meanwhile, the AMT has been around with the Nexon since its inception. While it may not offer smooth gear changes, it is more likely to offer you a smoother long-term ownership experience.

Also Read: 10 Discontinued DCT Cars In India

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Nexon Diesel — Expected vs Launch Price Comparison

For the Nexon diesel variants, we expected the lower variants to cost Rs. 1.20 lakh more than the comparable petrol trims and the higher variants to cost Rs. 1.40 lakh more. Tata Motors ended up pricing the Nexon diesel variants Rs. 1.30 lakh to Rs. 1.40 lakh more than comparable petrol trims.

With the Nexon diesel variants, we were spot on with the lower 2 trims’ prices with <1% deviation. We achieved passing marks or distinction in 10 out of 15 prices. This is after excluding the Fearless Plus (non-S) variants, which were out of syllabus.

Price Reaction

The Nexon petrol variants worked out pretty much as we expected. They still carry an attractive starting price but they miss out on a long list of must-have features. The lower-mid variants continue to carry a fat premium for the small number of features they add. The shocker this time is that even the higher variants don’t come across as good value for money. At least the older Nexon’s higher variants, which have a balanced feature mix, offered decent value. For now, you’ll have to wait for our Nexon Variants Explained article to find out which variant offers a good balance of value for money and a nice mix of features without drastically impacting the ownership experience.

With the diesel variants, we encountered a few surprises. Firstly, the price difference between the automatic and manual variants is not consistent at Rs. 70,000. The Fearless automatic and its derivatives cost only Rs. 60,000 more than the comparable manual variants.

The second shocker is that, even with a slightly lower cost for the AMT automatic in the higher trims, the top model diesel-automatic still ended up costing Rs. 15.50 lakh. Not only did we miss the mark by up to 8.0%, with the diesel top model, the prices also breached the psychological barrier of Rs. 15.0 lakh.

In terms of petrol to diesel price gap, our expectation was of Rs. 1.20 lakh - Rs. 1.30 lakh price premium for the diesel engine. This final price gap turned out to be Rs. 1.20 lakh - Rs. 1.40 lakh.

In terms of accuracy, we were within the 5% margin of error with 10 out of 15 estimations while 1 was out of syllabus — as in Tata added the Fearless Plus non-S in the brochure long after the initial unveil.

Learnings/Observations

With this exercise, we learned that Tata Motors are foreseeing healthy demand in the auto sector in the coming quarters. The higher than expected prices of the Nexon suggest that they are also confident that they won’t affect the Nexon’s performance in the sales numbers.

Despite the Brezza taking the lead in the B2 SUV space and the Fronx filling in the gaps, Tata Motors don’t see them as severe threats. The pricing conveys Tata’s confidence in the Nexon; perhaps even a bit of overconfidence, you read into it a little deeper into it.

Inconsistent Communication From Tata

The one thing that really threw us off the rails quite often between the unveil and the price announcement was the frequent changes in the brochure. We also noticed multiple changes in the variant features, variant-colour and the variant-powertrain combinations since the unveil and the price announcement.

There was also a considerable gap in communication depending on the medium of information and when you consumed that information. The information changed from medium to medium and varied considerably on an ongoing basis. For instance, the Fearless Plus non-S variant didn’t exist at all at the time of reveal.

The only thing we can do going forward with Tata’s future product launches is to consume it with a healthy dose of speculation. While we should expect frequent changes in the information and inconsistencies across media from Tata, we will still provide an estimate of expected prices and revise it if a change drastically impacts the information we’re putting out.

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