Go Back   Team-BHP > BHP India > The Indian Car Scene


Reply
 
Thread Tools Search this Thread
Old 1st February 2012, 12:18   #181
BHPian
 
designersf's Avatar
 
Join Date: Aug 2007
Location: Ann Arbor
Posts: 602
Thanked: 58 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by carboy View Post
Diesel engines are more expensive to manufacture as compared to similar petrol engines, hence diesel cars are more expensive. They are not expensive because diesel is cheaper than petrol.

By your logic, the more money one spends buying a car, the cheaper he should be provided with fuel.
You are right to a certain extent. Its a little expensive but not by much. The 1L premium car makers charge for diesel variants is nothing but fleecing. They are taking advantage of the situation to make more profit. Ideally, a car with a diesel engine should not be more than 30k (MAX) more than its petrol variant.

Quote:
Originally Posted by lurker View Post
A 5 kva Mahindra genset (Diesel) costs about the same as a 5 kva Honda genset (Petrol), so basically it's more like the companies fleecing more from customers on pretext of diesel.
Totally agree.
designersf is offline   Reply With Quote
Old 1st February 2012, 12:29   #182
BHPian
 
avira_tk's Avatar
 
Join Date: Nov 2011
Location: Bangalore
Posts: 672
Thanked: 643 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

The government does not have much of a long term view with taxing cigarettes, tobacco cultivation is restricted because of some treaty that was signed. Eventually this means that total sales of tobacco products will come down and the tax base related to it .
Taxing diesel cars for correcting subsidies is just populism, diesel cars are already taxed more because they cost more. People talking about merc owners sound like broken records, a merc owner has no obligation to pay 150% additional running cost because some bike/nano/hatch owner feels its unfair. Buying a vehicle means you should be able to afford fuel, buying a cheap petrol vehicle then complaining about merc owners misusing subsidies is jealousy. Diesel cars are popular because they are fuel efficient, if diesel were to be priced 25% more, the appeal for lower running costs will not disappear.
One of the biggest consumers of subsidised diesel are stand alone mobile towers, I bet none of the equality warriors here will be willing to pony up the difference with higher monthly bills to recover subsidies used by a hugely profitable industry.
avira_tk is offline   (2) Thanks Reply With Quote
Old 1st February 2012, 13:15   #183
Distinguished - BHPian
 
condor's Avatar
 
Join Date: Jun 2006
Location: Speed-brkr City
Posts: 10,748
Thanked: 4,338 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by designersf View Post
.. Its a little expensive but not by much. The 1L premium car makers charge for diesel variants is nothing but fleecing. They are taking advantage of the situation to make more profit. Ideally, a car with a diesel engine should not be more than 30k (MAX) more than its petrol variant.
+1

Take the case of the Indica petrol & diesel: they shared most of the engine, except the fuel delivery & combustion mechanism. Were there any other major differences ? I dont think so.
condor is online now   Reply With Quote
Old 1st February 2012, 17:38   #184
BHPian
 
man_and_machine's Avatar
 
Join Date: Aug 2008
Location: Bangalore
Posts: 428
Thanked: 215 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Slow de-regulation of diesel is the only long term solution, I guess its written on the wall. Up to a certain limit the oil burners will make sense in terms of over all TCO over its petrol counterpart, and beyond that it will surely not do so. Will the extra 80K hit the point, it just might. Assuming a 5 year ownership plan a diesel with the new regime will have almost the same TCO as Petrol equivalent. Then the choice of D or P will depend on your driving taste and not economics. Of course we are not talking commercial vehicles here.

Here is a funny example, has anyone heard (or rather seen a Petrol Innova :-) ). Well such a thing really exists! A V trim level comparison for Petrol and Diesel is as follows.

Diesel: 13,24,000
Petrol: 12,69,000
-----------------
Diff: 55,000
-----------------
This is just the ex-show room price now add to this diff the existing delta on on Road ~8K
add to this the new 80K diff, net you have 55 + 8 + 80 = 143K, handsome!

(I am assuming full cash deal, so no interest component added to the equation, if you add it it make the D case even worse, anyways)

Per KM cost of Running a D4D = 49/12 ~ 4
Per KM cost of Running a VTTI = 75/10 ~ 7.5

Diff per KM = 3.5 (just approx math)

Now for D4D to break even with VVTI you will need to run 1,43,000 / 3.5 = 40,000 kms which I guess will get done in less than 2 years (even for a family car).

So irrespective of 80K or not, the D4D case will still survive. Meaning the Govt intention to "make Diesel less attractive" will hold the case for cars where the over all diesel consumption is higher (as a segment). The case is different when you move down the cost line to say a C segment 9L car where 80K is ~ 8 - 10% of the price, that is a huge top up you have to now account for.

I am not sure what the Govt is really trying to achieve by doing this. It seems like they would really want Diesel to be used for mass movement and discourage "affordable" commuting (Read B+ and C seg cars).

(All math and numbers approx, just to make a point).
man_and_machine is offline   Reply With Quote
Old 1st February 2012, 18:37   #185
Senior - BHPian
 
Join Date: Mar 2007
Location: Mumbai
Posts: 1,457
Thanked: 282 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by lurker View Post
A 5 kva Mahindra genset (Diesel) costs about the same as a 5 kva Honda genset (Petrol), so basically it's more like the companies fleecing more from customers on pretext of diesel.
Diesel engines run with higher compression ratio than a petrol engine. Hence they have to be built stronger & more rugged. Ergo, they are more expensive to build.

Diesel Cars costs more than Petrol cars all over the world. And it most places, diesel fuel itself costs the same or is even more expensive than petrol (for eg. in the US, diesel costs a little more than petrol).

Quote:
Originally Posted by designersf View Post
You are right to a certain extent. Its a little expensive but not by much. The 1L premium car makers charge for diesel variants is nothing but fleecing. They are taking advantage of the situation to make more profit. Ideally, a car with a diesel engine should not be more than 30k (MAX) more than its petrol variant.



Totally agree.
I have no idea what's the current price diff. When I bought my Swift Petrol, the corresponding diesel variant was around 40K more - which seemed about right. And sort of corresponds with what you say about it costing 30K more.
carboy is online now   Reply With Quote
Old 2nd February 2012, 17:08   #186
BANNED
 
Join Date: Apr 2006
Location: chennai
Posts: 703
Thanked: 54 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by rtandon View Post
Eh, what twisted logic is this? Grow weed.


I smoke and I think they are right in raising sin taxes, because higher taxes reduce consumption. And we all know that smoking in injurious to health.

So every time the govt needs money is it fair to keep increasing excise on cigarettes and alchocol ? Yes if smoking is injurious then why not ban it completely ?
greatmana2000 is offline   Reply With Quote
Old 2nd February 2012, 17:38   #187
Senior - BHPian
 
aniketi's Avatar
 
Join Date: Sep 2009
Location: Pune
Posts: 1,270
Thanked: 711 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Is Government planning to impose same duty on all diesel cars? That will make things difficult for small diesel cars. E.g. Beat, the difference will be more after duty. It will be like approximately 2 lacs between petrol & diesel. So both petrol & diesel will not sell much for GM. They will be in big trouble. For bigger cars like Fortuner, BMW, Audi etc that 80 K will not affect much as the total % of the car value will be very less in that case. But for small cars it will be much higher.

Can government apply in % depending on the car value? Like 10% of the ex showroom price? so it will be like 40 K for car like beat & 2-3 lacs for cars like BMW, Audi, Merc etc. Government will also benefit by this. What do you think guys?
aniketi is offline   (1) Thanks Reply With Quote
Old 2nd February 2012, 19:29   #188
BHPian
 
KINI's Avatar
 
Join Date: Jan 2012
Location: chennai
Posts: 302
Thanked: 101 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by aniketi View Post

Can government apply in % depending on the car value? Like 10% of the ex showroom price? so it will be like 40 K for car like beat & 2-3 lacs for cars like BMW, Audi, Merc etc. Government will also benefit by this. What do you think guys?
This is what will happen most probably.However I expect incremental tax slabs for cars as they grow in size.
KINI is online now   Reply With Quote
Old 2nd February 2012, 20:13   #189
BHPian
 
Marlon's Avatar
 
Join Date: Feb 2008
Location: Chennai
Posts: 273
Thanked: 78 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

I would prefer if govt imposes tax like , diesel cars below 6 lacs - no tax. Exclude the T- board. This will benfit the middle class and hence no vote loss.
Above 6 lac - slabs based on ex showroom price.
Little tricky for auto companies since typically the 'V' variant will be tax free and 'Z' variant will be taxed.
Marlon is offline   Reply With Quote
Old 2nd February 2012, 20:22   #190
Senior - BHPian
 
romeomidhun's Avatar
 
Join Date: Nov 2007
Location: Chennai
Posts: 2,633
Thanked: 1,903 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

My suggestion - ban Diesel cars priced above a price range, say, 10L. Those who can afford to buy cars that cost more than that, can definitely afford to buy Petrol also!
romeomidhun is offline   Reply With Quote
Old 2nd February 2012, 21:16   #191
Senior - BHPian
 
Join Date: Mar 2007
Location: Mumbai
Posts: 1,457
Thanked: 282 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by Marlon View Post
I would prefer if govt imposes tax like , diesel cars below 6 lacs - no tax. Exclude the T- board. This will benfit the middle class and hence no vote loss.
Less than 1% of India owns cars. Even fewer a diesel car. So there won't much of a vote loss even if all diesel cars are taxed.
Also what %age of middle class people with cars actually vote?

Quote:
Originally Posted by romeomidhun View Post
My suggestion - ban Diesel cars priced above a price range, say, 10L. Those who can afford to buy cars that cost more than that, can definitely afford to buy Petrol also!
I think people who buy a vehicle should be able to afford fuel -otherwise they shouldn't buy it.

Last edited by carboy : 2nd February 2012 at 21:18.
carboy is online now   Reply With Quote
Old 2nd February 2012, 22:15   #192
Senior - BHPian
 
vinaydas's Avatar
 
Join Date: Apr 2007
Location: Bengaluru
Posts: 1,362
Thanked: 85 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by Marlon View Post
I would prefer if govt imposes tax like , diesel cars below 6 lacs - no tax. Exclude the T- board. This will benfit the middle class and hence no vote loss.
Above 6 lac - slabs based on ex showroom price.
Little tricky for auto companies since typically the 'V' variant will be tax free and 'Z' variant will be taxed.
the average middle class owns a petrol two wheeler and a petrol hatchback like the alto at the most.

Its the Not so average IT Joe with a Salary in range of 7 LPA -14 LPA who do own most of the "VDI's" and "CRDI's" and they definitely will will not feel the pain with their leased cars and company owned cars.
vinaydas is offline   Reply With Quote
Old 3rd February 2012, 11:25   #193
Senior - BHPian
 
aniketi's Avatar
 
Join Date: Sep 2009
Location: Pune
Posts: 1,270
Thanked: 711 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by Marlon View Post
I would prefer if govt imposes tax like , diesel cars below 6 lacs - no tax. Exclude the T- board. This will benfit the middle class and hence no vote loss.
Above 6 lac - slabs based on ex showroom price.
Little tricky for auto companies since typically the 'V' variant will be tax free and 'Z' variant will be taxed.
Why so? Actually many Indica & Indigo are used for commercial purpose, that means they are using more diesel than others and they are making money on that. So for T badge, government should impose more one time duty as they are getting maximum benefit of subsidy given on diesel & they are using it for commercial purpose & earning money on it.

Imposing taxes in slabs is also a good idea. They can make slabs as per vehicle capacity. Means Below 1.2 Lit diesel engine, X amount, between 1.2 to 2.0 Lit Y amount and above 2.0 Lit Z amount. It will avoid confusion as well as it will make taxation more linear. http://www.team-bhp.com/forum/images...s/Clapping.gif
aniketi is offline   Reply With Quote
Old 3rd February 2012, 12:07   #194
BHPian
 
Join Date: Dec 2010
Location: Chennai,Bangalo
Posts: 401
Thanked: 198 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by tsk1979 View Post
I don't think many people realize that the carbon footprint of a a diesel car is much less than that of a similar petrol car.
Sure, add a 50,000/year tax to diesel cars to dissuade people from buying diesel cars, but when all of them start buying petrol vehicles, its going to be problem, esp if India starts dealing in carbon credits and all seriously.
my 2 cents
Well all said and done there seems to be a disparity in that Indian automotive industry does not focus much on rolling out technology driven diesel engines but the demand keeps growing.
If there are additional tax on diesel cars then diesel price should not be deregulated, akin to getting caught between devil and deep sea.

Well for the cigarette community pl make them sky high no issues. the govt can also increase liquor rates and all will be happy to rake in the moolah.

Cheers
Prasad
Dieseldunk is online now   Reply With Quote
Old 3rd February 2012, 12:20   #195
BHPian
 
Marlon's Avatar
 
Join Date: Feb 2008
Location: Chennai
Posts: 273
Thanked: 78 Times
Default Re: Govt plans to impose additional levies on cigarettes and diesel cars

Quote:
Originally Posted by aniketi View Post
Why so? Actually many Indica & Indigo are used for commercial purpose, that means they are using more diesel than others and they are making money on that. So for T badge, government should impose more one time duty as they are getting maximum benefit of subsidy given on diesel & they are using it for commercial purpose & earning money on it.
I have also said the same thing. Exclude the T-Boards even if they cost below 6 Lacs. They should be charged higher.
Marlon is offline   Reply With Quote
Reply


Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
Govt plans 10 kms road to Land's End at Dhanushkodi gabrielthomas Street Experiences 13 9th January 2017 15:04
Govt plans incentives for surrender of old vehicles saket77 The Indian Car Scene 66 19th December 2016 12:57
Rumour: Mahindra shrinking the Bolero for lower levies a4anurag The Indian Car Scene 5 29th March 2016 09:29
Kerala to impose additional tax on the 2nd car of a family! kutts The Indian Car Scene 99 3rd November 2013 12:19
Govt plans amendment to Motor Vehicles Act - To task automakers for lemons SR-71 The Indian Car Scene 23 8th September 2011 18:59


All times are GMT +5.5. The time now is 17:36.

Copyright 2000 - 2017, Team-BHP.com
Proudly powered by E2E Networks