[Late Shift]

The Honda CBR300R​

Honda recently announced the price that it will sell the CBR300R for in the UK. It has been priced at £4,299, and that model will come with ABS standard.

UK customers will be able to order the new Honda CBR300R from the 4th of August, and deliveries of the bike will commence at the end of the month.

One of the biggest things going for Honda is affordability. This is probably one of the reasons why Honda decided to price the CBR300R at a price that is £900 less than the Kawasaki Ninja 300.

The Kawasaki Ninja 300​

That decision also makes sense since the Ninja 300 cranks out 34.95 hp while the CBR300R only creates 30.4 hp. On the measure of displacement the Ninja 300 also out does the CBR300R with 296 cc compared to the CBR300R's 286cc. I guess 300cc is just a nice round number, not intended to actually give you an idea of the displacement of the bike you are buying.

Do you think people will be swayed more by power output or pricing when deciding which bike to purchase?

 

[MotoMike]

I think it's safe to say that CBR300R/RA pricing will undercut the Ninja 300 price in literally every market where both bikes are sold.

 

[Ortega]

it's good they undercut the ninja, doing so in every market is a good thing to do.

 

[Late Shift]

Do you think that Kawasaki believes that people like the Ninja enough to choose it over the CBR300? Is Honda more volume where Kawasaki has higher margins or something?

 

[Cropper]

Honda is a bigger company. Every lawnmower they sell keeps the price of your CBR down... FACT.

Oh and not to mention its like that across the range. For example the CBR1000RR undercuts the ZX-10R, as does the 600RR vs the ZX-6R...

 

[Ortega]

Honda is a bigger company. Every lawnmower they sell keeps the price of your CBR down... FACT.

Oh and not to mention its like that across the range. For example the CBR1000RR undercuts the ZX-10R, as does the 600RR vs the ZX-6R...

that is true, with that kind of product line they can afford a loss now and gain later.

 

[Late Shift]

So its really due to economies of scale and also the diversification of the Honda brand. This is a little out there, but it's like Wal-mart. They make so much and so many things that they can bring the price of everything down.

 

[Lokis Tyro]

I would bet on Honda being a more efficient company as well. I can see it in the design of the bike compared to the Ninja. Parts and molds for plastics look like they would be cheaper to produce on the CBR IMO.

 

[Cropper]

So its really due to economies of scale and also the diversification of the Honda brand. This is a little out there, but it's like Wal-mart. They make so much and so many things that they can bring the price of everything down.

Similar, Wal-Marts advantage is their buying power and audience. They use that to leverage lower prices. Say you're Coca-Cola, I'm Wal-Mart, I ask you for say a 15% reduction in purchase price. You say no. I turn around and say well Pepsi already gave it to me, what are you going to do, say no and have me crucify your product in store because it costs me margin vs Pepsi, or comply because you need the audience?

 

[Ortega]

Good way to put it.

 

[MotoMike]

Honda is a bigger company. Every lawnmower they sell keeps the price of your CBR down... FACT.

Oh and not to mention its like that across the range. For example the CBR1000RR undercuts the ZX-10R, as does the 600RR vs the ZX-6R...

that is true, with that kind of product line they can afford a loss now and gain later.

I wouldn't say that Honda's power equipment (or any of their other product lines) supports or subsidizes the CBR300R... every product a company manufactures has to stand on its own, both financially and in terms of profitability. In the case of a bike like the CBR300R (and its predecessor, the CBR250R) Honda makes a profit on these motorcycles by the sheer volume of units built and sold globally. While Honda's per unit profit may be relatively small on the 250R/300R bikes as compared to each CBR1000RR they sell, the total volume of 250R's & 300R's is what makes these small bikes so profitable. At the end of the day, Honda makes a lot more money on the small CBR's than they do on the 600 & 1000 CBR's. I'm just guessing, but I'll bet they have built and sold something like 50 or more CBR250R/RA's to every 1 CBR100RR over the past three model years. So even if the per unit net profit on the 250R is say $200, and the per unit profit on the 1000RR is $2000, it's easy to see where they will make a bigger overall profit margin. It's simple economies of scale.

Another aspect to all of this, is that these companies make a significant percentage of their yearly profits on sales of OEM replacement parts. This is true across all product lines. Using the CBR250R as an example, if you wanted to build this bike from the ground up, buying each individual OEM part including every last nut, bolt and screw, it would easily cost 3 to 4 times more than what the very same bike sells for at full retail price off the dealers sales floor. Why? Because that OEM replacement part which has a MSRP of $35 USD, likely cost less than $5 for Honda to manufacture (again, mass production & economies of scale). So, OEM replacement parts are a huge profit center for a company like Honda... you could say that the motorcycle (or car, lawnmower, watercraft, ATV, generator, etc.) is the vehicle to sell OEM replacement parts.

While Honda Motor Co. LTD. is a huge, diverse company worldwide, so is Kawasaki Heavy Industries. KHI is the parent company of Kawasaki Motor Corp. KHI is a manufacturer of aircraft engines, off shore oil supertankers, robotics for mass production, underwater communication cable, heavy & light rail transit, to name just a few. In the bigger picture of KHI assets, the Kawasaki Motor Corp. division (motorcycles, watercraft, and ATV's) is a relatively small piece of the corporate pie, however it does stand on its own, and it makes money.