Re: July 2011 : Indian Car Sales Figures The sales figures are not very surprising. A few important points are
1) Increase in interest rates - This not only affected EMI's that you would pay for the car, but also the Home. Many if not Most people would not own homes as a part of family heirloom but as a mortgage security with bank. The interest rate increase affects this as well. For example a person paying EMI of 18K now has to pay almost 20K. So most people would put off 'buying a car on loan' till salaries increase (read increments/appraisals) or EMI's reduce.
2) Increase in prices - This affects everyone. It also has an effect on the overall family budget. It is not just fuel (petrol) but priices of Home LPG has also gone up. Also, prices of essential items has increased. e.g: Cooking oil from Rs 64 -67 per litre (Sunflower) 6 months ago is now approx 75-78 per litre. Groundnut has increased 30%, Sugar - 20% and so on. Also, because vegetable vendors were getting lower profits because of increase in these things, prices of this also increased which means your monthly budget of say 8K for these expenses just went up by 20% to 9.6k.
3) Availability of cheaper/ better alternatives - Most major cities now have Radio cab service. During weekdays a person would use company cab (most companies have this) and weekends call a cab. If your average weekend use is 100 kms, in a month this translates to 400 kms. The Cab costs around Rs 12 average, translating to 12*400 = 4800. Then there are rickshaws, buses, metro etc. This is still cheaper than paying EMI +fuel and also you have a chauffer.
Add to this other expenses like fees, incidental expenses etc and your monthly spend has gone up a lot. Can you afford to pay EMI for a car which you sparingly use just to show off that you have a car (a major reason many in India buy a car).
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Another point being made was about the Nano, sure the Nano willl take a hit. It was meant for the Great Indian Middle class who used a scooter/bike. But now, can the middle class guy afford to pay the EMI for the car (a very 'low' 4K compared to a bikes 1-3K) + reduced FE (compared to bike) and suddenly with the reasons above, the Great Indian Middle class cannot afford this and will make do with a bike.
Can this change? Yes, based on discussions with a Sr. TATA chap, the Nano Diesel has the potential to change fortunes. But they are delaying the launch to ensure no niggles and safety issues. Also trying to get the NVH to not resemble a Garuda/APE rickshaw. If they are successful, and they have been pretty successful from what I understand, this can be the gamechanger.
I expect the Toyota numbers to increase and settle soon. FIAT it seems is content with getting the moolah from 'side business' - Supplying engines to Tata/Maruti and letting Tata use their plant for painting/ body work etc. Why invest time and money on dealerships when you can do this?
Ford India is going the Ford US way - Getting complacent to a point where a Jap/ Korean/ Indian company whips them, then doing damage control. Honda - Well, this is a prime example of 'be confident - not - overconfident'. Nissan is slowly building numbers. |