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Old 19th November 2011, 08:27   #106
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Default Re: Maruti hikes diesel car prices by up to 10,000 rupees

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Originally Posted by ethanhunt123 View Post
If i am a shareholder of Maruti, why should i be OK with Maruti absorbing the cost increase and not passing it on to the consumer IF he is willing to pay for it ? Anyway Maruti has lost a lot of money this year due to strike, they wont be willing to absorb any cost. As far as other models are concerned, Swift is the model where consumers would be most willing to pay more.

Alto - Under pressure from Eon, cant raise price
Estilo/Wagon R - No diesel model, cant increase price beyond an extent
Ritz - Limited market appeal, even when its available off-shelf and Swift has a 12 month waiting, people prefer Swift. Cant increase price beyond an extent
SX4 - Already laggard and value is its playing card
Buddy , share holders do not buy the products which the company;s produces . it;s the consumer who buys them . you need to think from his perspective rather than a share holder. 10 K might be a small amount but it will pinch hard some body who has been waiting for his dream car for 6 months and imagine the shock he gets while taking the delivery. For him this is a un planned cost. he might still take delivery out of frustration . As for strike and all goes, these are their own making . these are business risks which one must account for in their balance sheets . why would the consumer pay for the strike in their factories .

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Originally Posted by ethanhunt123 View Post
I assumed 6k each. Lets assume cost increases by x each on Diesel & Petrol with a split of 20-80 for Petroliesel. Considering the fact that petrol price rise is not feasible, Maruti would have to increase the price of diesel by 1.25x And keep in mind this is assuming people dont withdraw booking of diesel cars due to 10k increase. (I think this will be the case). So net net Maruti doesnt lose any money.
.
you have crefully ignored that 0.25% , MSIL makes on selling 80 % diesel cars. 80*1 =1

If u consider those.25 for petrols it will be 20*0.25 but since they cannot increase the petrols , they added those 0 .25 to diesel . So suddenly diesel becomes 80*1.25 ..out of these 80 ,20 account for those petrol cars., what about rest of 60 , which were never sold. Isn 't that pure profit .

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Originally Posted by ethanhunt123 View Post
Drag Maruti why ? Maruti does not dominate market with >80% market share anymore. So its not a monopoly. And everyone has freedom to price their products with margin they think is fine, the customers will give their verdict by buying it if they think its still worth it. Simple rule of demand and supply. BTW give me an example where a price increase of ~1.4% (10k/6L) in a mature market or otherwise led to company being sued ? If this was the case, no company would have ever been able to raise prices. BTW your logic of both Swift's being same hence legally price rise on one not possible - FALSE. Swift Petrol and Swift Diesel are two different products. Company is willing to price them as they wish seperately.
it does Dominate the market , else how would you explain their action of increasing the prices of only diesel cars. for other manufacturers any price increase has been across the board IMO if it;s due to RAW Material . For me these are unfair business practices which must be stopped.

In a mature market nobody will even try to increase the prices arbitrarily because they know the consequences . India , well , it;s a diff story and even if some body objects Corrupt politicians make sure that the voice is suppressed either by force or by money . MSIL;s Own union leaders Mr Sonu gujjar & other good examples from what ever i have read in news . you are either bought over or crushed in India . history is filled with such examples
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Old 19th November 2011, 10:55   #107
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Default Re: Maruti hikes diesel car prices by up to 10,000 rupees

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Originally Posted by shashank.nk View Post
Well if you compare the mid-variant of a car in a higher segment (higher segment based on price) with that of a high-end variant of a car in a lower segment, you're bound to find the latter more VFM. IMHO, you should compare the Ritz with the Figo, as they are priced similar. The base variant of the Swift is about 30k more than the base Figo.
Agreed but a lot of people make their purchase decisions like that. A couple of my friends & me have been looking for a hatch for the last 3-4 months but we all have a maximum budget in mind. Within that budget, we compare the Figo top end with the Swift VDI. Just as a lot of people earlier would have compared the old VDI ABS with Figo top end.
IMHO, swift has placed itself in a higher segment by pricing its ZDI version so expensive though the people still don't perceive it as a premium hatchback (atleast the people I know ). I believe both the Figo and Swift cater to the same segment of the population and somebody who buys Swift wouldn't necessary get the feeling of buying a car of a higher segment like you would if you buy i20 or Polo.
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Old 19th November 2011, 13:36   #108
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Default Re: Maruti hikes diesel car prices by up to 10,000 rupees

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Originally Posted by .sushilkumar View Post
Buddy , share holders do not buy the products which the company;s produces . it;s the consumer who buys them . you need to think from his perspective rather than a share holder. 10 K might be a small amount but it will pinch hard some body who has been waiting for his dream car for 6 months and imagine the shock he gets while taking the delivery. For him this is a un planned cost. he might still take delivery out of frustration . As for strike and all goes, these are their own making . these are business risks which one must account for in their balance sheets . why would the consumer pay for the strike in their factories .
Consumer might buy the products, but company and the pricing manager has to think more of shareholders interest. And 1% rise in price will pinch a guy who is paying 7L+ hard ? Hard to believe. Besides, if he does not think that the price rise is justifiable, he is free to cancel his booking and buy any other car in the market.

No company factors in things like Strike in their balance sheet, if they would - you would be complaining why is Maruti charging more profit if there is no strike.


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Originally Posted by .sushilkumar View Post
you have crefully ignored that 0.25% , MSIL makes on selling 80 % diesel cars. 80*1 =1

If u consider those.25 for petrols it will be 20*0.25 but since they cannot increase the petrols , they added those 0 .25 to diesel . So suddenly diesel becomes 80*1.25 ..out of these 80 ,20 account for those petrol cars., what about rest of 60 , which were never sold. Isn 't that pure profit .

I dont think you are getting the maths right

Total cars sold = 100
Petrol cars = 20
Diesel cars = 80

Total cost increase considering all cars = 100x

Extra revenue from petrol cars = 0 (no price increase)
Extra revenue from diesel cars = 1.25x multiplied by 80 = 100x

Net extra profit to company = revenue - cost = 100x - 100x = 0

Where is the extra profit buddy ?



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Originally Posted by .sushilkumar View Post
it does Dominate the market , else how would you explain their action of increasing the prices of only diesel cars. for other manufacturers any price increase has been across the board IMO if it;s due to RAW Material . For me these are unfair business practices which must be stopped.

In a mature market nobody will even try to increase the prices arbitrarily because they know the consequences . India , well , it;s a diff story and even if some body objects Corrupt politicians make sure that the voice is suppressed either by force or by money . MSIL;s Own union leaders Mr Sonu gujjar & other good examples from what ever i have read in news . you are either bought over or crushed in India . history is filled with such examples

If they did dominate the market, they would have easily increased price across the board without worrying about only petrol. As far as other manufacturers are concerned, even if they increase prices on petrol models, its compensated by higher discounting on them - case in mind Skoda. They hiked prices by ~20k on laura a month back but higher discounts on TSi are back.

And my point is, why shouldnt they increase the prices if they want to in a free market economy. Its not as if they are forcing people to buy Swift. If someone doesnt think its priced reasonably, they are free to go ahead and buy something else. Loads of options in the market.
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Old 19th November 2011, 14:26   #109
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Default Re: Maruti hikes diesel car prices by up to 10,000 rupees

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I believe both the Figo and Swift cater to the same segment of the population and somebody who buys Swift wouldn't necessary get the feeling of buying a car of a higher segment like you would if you buy i20 or Polo.
Well, to be honest Swift is neither as cheap as Figo/Beat/Ritz nor is it as expensive as the i20/Fabia/Polo/Punto so it kind of fits in between based on pricing.

Maruti hiked the prices but were careful not to put it very close to similar spec models from competitors which are in a higher segment.

Whether Swift is a premium car or no i cannot comment, you do get many features for the price of the ZDI, except space and boot. What i can say for sure is Figo titanium v/s Swift VDI the Figo is more VFM for sure, but then again IMHO, it also is a segment lower.
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Old 19th November 2011, 15:55   #110
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Default Re: Maruti hikes diesel car prices by up to 10,000 rupees

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Originally Posted by shashank.nk View Post
Well, to be honest Swift is neither as cheap as Figo/Beat/Ritz nor is it as expensive as the i20/Fabia/Polo/Punto so it kind of fits in between based on pricing.

Maruti hiked the prices but were careful not to put it very close to similar spec models from competitors which are in a higher segment.

Whether Swift is a premium car or no i cannot comment, you do get many features for the price of the ZDI, except space and boot. What i can say for sure is Figo titanium v/s Swift VDI the Figo is more VFM for sure, but then again IMHO, it also is a segment lower.
IMHO, premium is a notion of perception. Price, yes plays an important part but so does the brand. Maruti has always been a people's brand so it isn't looked at as a premium brand like VW is. Features, in my opinion, do not make a car premium. All the features of Swift ZDI are also available in Figo top end.

Having sad that, if I had the money to buy a ZDI priced car, I would still pick ZDI over a Polo or i20. Not at its VDI version. That in opinion is much less loaded than what is available at that price point from the competition and I am glad you agree
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Old 19th November 2011, 20:38   #111
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Default Re: Maruti hikes diesel car prices by up to 10,000 rupees

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Originally Posted by sunnyworld View Post
Features, in my opinion, do not make a car premium. All the features of Swift ZDI are also available in Figo top end.
I should've put it more clearly. The reason i mentioned features was because a lot of people feel that the ZDI variant is seriously overpriced and no longer is VFM. If you keep the 'whether Swift is premium or not' debate aside, it appears to be very good car for its price,the ZDI.

Its fun to drive, superb handling, reliable engine, backed by Maruti A**, interior quality seems improved though we'll have to wait to see if its rattle free, more spacious than before and overall a step-up from the previous gen Swift.

Somehow, for me it ticks all crucial boxes where other cars falter, except boot space and may be space at rear.

Maruti shouldn't have discontinued the ABS option on Swift VDI, it was a bad move. At the VDI price point, if one is willing to compromise on the FTD factor and is looking more for VFM, Figo titanium is the ideal choice.

Last edited by shashank.nk : 19th November 2011 at 20:40.
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Old 1st December 2011, 16:16   #112
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Default Re: Maruti hikes diesel car prices by up to 10,000 rupees

Now, Maruti is mulling a hike in prices of all cars, not just diesel, effective January '12.

Maruti Suzuki India mulls price hike to counter falling rupee - The Economic Times
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Old 1st December 2011, 17:10   #113
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Default Re: Maruti hikes diesel car prices by up to 10,000 rupees

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Now, Maruti is mulling a hike in prices of all cars, not just diesel, effective January '12.

Maruti Suzuki India mulls price hike to counter falling rupee - The Economic Times
Very surprising considering their Nov sales. Details in Maruti Suzuki sales in November 2011 - Moneycontrol.com -

Sincerely hope this doesn't lead to other manufacturers following the market leader
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