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Old 26th July 2015, 09:51   #136
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

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Originally Posted by apachelongbow View Post
why blame the Germans alone? At least the German brands have a brand value to speak of. Only in India does a low value brand like Toyota launch...
No one is blaming the Germans alone buddy, just sticking to the title of the thread, that's all. But as you said, Toyota can't play the holy angel persona with their pricing either. We have to accept that Innova and Fortuner are overpriced vehicles, period! Feel free to create a thread on 'Toyota's greedy pricing strategy' (if not already there) and we will gladly contribute.

No one here's questioning the brand pull of the Germans. We would all love to be spotted driving a BMW than a Toyota(Lexus is another story!) But we are not here to let manufacturers take advantage of our aspirations and rip us off. Sadly, that's exactly what's happening in our country. All some people care about is the badge on the hood, and they're ready to shell out a bomb to acquire that badge. Surely, it's personal decision to determine what to do with one's own money. But, how many of these non-petrol head German car owners care about the specs underneath their priced possessions?
Few instances I can recall,
  • A 40+L GLA having even lesser power output than a 20L Jetta.
  • A 20+L Jetta made smaller, redesigned and 4 rings stuck to it and marketed as a 40L A3.
  • A price difference of 1L between a CBU and CKD C Class.
  • A price difference of 1L between a CKD and totally manufactured in India 3 series.
  • A CKD 1 series and A Class priced 2-3 L above a CBU V40.

And these are in addition to the comparison I made in the above post.

If this is not daylight robbery, I don't know what is!
And things don't end there. Suppose you manage to cough up big money to quench your aspirations and unfortunately some major component fails. Apart from the irritating 'Indian fuel problem' rant made by the service execs, one's subjected to financial and mental agony to get their beauty fixed. Of course, not all are so unlucky. But I've heard too many stories to let this one pass.

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Originally Posted by Nithesh_M View Post
1) So you are okay with Germans charging a premium because of their "supposed" brand value despite ranking below the Japanese in terms of affordability, reliability and long term maintenance
Exactly! Though I must admit I never was a fan of Toyota's vehicles in India. They lacked that finesse and soul of similarly priced Germans (Yes! I'm a self-confessed German fan ). But when you think of it, apart from the points you have mentioned, it's Toyota who provides service and customer support worthy of a high value, aspirational brand than the Germans. What Toyota has essentially done with their over the top pricing is charge the customer extra for all that. And that kinda makes sense, well at least more sense than the Germans' strategy.

It's funny but us customers are also to blame for the inflated prices thrust upon us by manufacturers. Some are ready to pay extra for brand recognition, prestige and finesse. Others are ready to pay extra for reliability, low maintenance and high resale. As long as these two groups flourish, neither the Germans nor Toyota are going to find a reason to drop prices. Sigh!

Last edited by GKR9900 : 26th July 2015 at 09:54.
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Old 26th July 2015, 12:37   #137
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

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Originally Posted by GKR9900 View Post
[*]A 20+L Jetta made smaller, redesigned and 4 rings stuck to it and marketed as a 40L A3.[*]A price difference of 1L between a CBU and CKD C Class.[*]A price difference of 1L between a CKD and totally manufactured in India 3 series.[*]A CKD 1 series and A Class priced 2-3 L above a CBU V40.[/list]
If this is not daylight robbery, I don't know what is!
It's funny but us customers are also to blame for the inflated prices thrust upon us by manufacturers. Some are ready to pay extra for brand recognition, prestige and finesse. Others are ready to pay extra for reliability, low maintenance and high resale. As long as these two groups flourish, neither the Germans nor Toyota are going to find a reason to drop prices. Sigh!
I can vouch for the lousy pricing of the A3. Test drove it with my cousin last week. The entry level car, about 28-30 OTR, doesn't have projector lamps, rear ac vent, no paddle shifters, and fabric upholstery. The MMI screen is bright and contrasty, but the resolution is grainy, a INR 10000 cell phone has better readability. Of course there is no navigation. Doesnt have rain sensing wipers, which were standard on my 2010 laura TSI ambiente.

I told my cousin to TD a jetta or an octavia, which will offer most of these missing features for an equivalent or lower price. But he will go for the A3, because it is important for this corporate image.

So I guess car companies are on one hand justified in taking advantage of this mentality, but I find it insulting. I cannot see myself spending money on such a nickel and dimed product.

Another gimmick they are running is based on the nomenclature. Audi has started naming its engines based on tune. So earlier all cars using the 2.0 TDI would have that as the badge, irrespective of the tune or the car or the brand. Now, the sales dude was actually trying to tell me that the 35 TDI is a different engine from the 40 TDI. So they want to make buyers of a more expensive variant or bigger car feel better, and will brazenly say that it is different engine.
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Old 26th July 2015, 12:52   #138
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

we need to consider few points before a fair comparison can be made vs overseas prices

Most of these MNC had set-up plants / dealerships in India in last 10 Years or so ,I am not much familiar with accounting but am sure that plant & machinery depreciation figures will be hitting balance sheets in a big way . If we compare overall volume of Luxury segment in India - say add the total number of cars in between three Germans for Year 2014 maybe 25-30000 which will be about same what BMW Group sells alone in one month in USA .

Then most of the models these companies sell here are adequately loaded even for base compared to not so loaded version overseas where we need to add couple of optional packages which does add fair amount to listed prices . GST & Destination charges are always extra in US / Canada & depending on province there may be some additional levies as well , whereas in India all prices are including Sales Tax .

Also consider the overheads in distribution here - high rentals , number of paid sales staffs as against mostly commissionable sales persons in US & then some well dressed waiters taking orders for cappuccino & pastries here unlike overseas where you will be guided to a coffee machine somewhere in a corner ( lexus is little different though )

And then our Tax structure

1 Excise duty of around 27-30 % on most of these cars / SUV
2 Sales tax of around 12-14 %

Most of the CKD models are prices competitively in my opinion , things do get different for CBU though . Now some companies like Mercedes are absorbing initial losses / loss of profits by selling CBU at lower launch prices as they do try to work on long term basis besides as a customer how will someone feel if one bought CBU @ 1 Crore only to see CKD prices going down to 70 Lac in couple of months ?

Last edited by Turbanator : 26th July 2015 at 13:08.
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Old 26th July 2015, 14:14   #139
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

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Originally Posted by GKR9900 View Post
No one is blaming the Germans alone buddy, just sticking to the title of the thread, that's all. But as you said, Toyota can't play the holy angel persona with their pricing either. We have to accept that Innova and Fortuner are overpriced vehicles, period! Feel free to create a thread on 'Toyota's greedy pricing strategy' (if not already there) and we will gladly contribute.

No one here's questioning the brand pull of the Germans. We would all love to be spotted driving a BMW than a Toyota(Lexus is another story!) But we are not here to let manufacturers take advantage of our aspirations and rip us off. Sadly, that's exactly what's happening in our country. All some people care about is the badge on the hood, and they're ready to shell out a bomb to acquire that badge. Surely, it's personal decision to determine what to do with one's own money. But, how many of these non-petrol head German car owners care about the specs underneath their priced possessions?
Few instances I can recall,
  • A 40+L GLA having even lesser power output than a 20L Jetta.
  • A 20+L Jetta made smaller, redesigned and 4 rings stuck to it and marketed as a 40L A3.
  • A price difference of 1L between a CBU and CKD C Class.
  • A price difference of 1L between a CKD and totally manufactured in India 3 series.
  • A CKD 1 series and A Class priced 2-3 L above a CBU V40.

And these are in addition to the comparison I made in the above post.

If this is not daylight robbery, I don't know what is!
And things don't end there. Suppose you manage to cough up big money to quench your aspirations and unfortunately some major component fails. Apart from the irritating 'Indian fuel problem' rant made by the service execs, one's subjected to financial and mental agony to get their beauty fixed. Of course, not all are so unlucky. But I've heard too many stories to let this one pass.



Exactly! Though I must admit I never was a fan of Toyota's vehicles in India. They lacked that finesse and soul of similarly priced Germans (Yes! I'm a self-confessed German fan ). But when you think of it, apart from the points you have mentioned, it's Toyota who provides service and customer support worthy of a high value, aspirational brand than the Germans. What Toyota has essentially done with their over the top pricing is charge the customer extra for all that. And that kinda makes sense, well at least more sense than the Germans' strategy.

It's funny but us customers are also to blame for the inflated prices thrust upon us by manufacturers. Some are ready to pay extra for brand recognition, prestige and finesse. Others are ready to pay extra for reliability, low maintenance and high resale. As long as these two groups flourish, neither the Germans nor Toyota are going to find a reason to drop prices. Sigh!
I tend to agree with you regarding the overpricing. Are German cars worth the money? In sheer value for money terms no. Likewise if we extend this further, is a Ferrari worth its asking prices? From an accountant point of view, of course not!! But from an aspirational viewpoint??
Now why Toyota comes into this picture is, Toyota routinely overcharges for its products, which are neither aspirational nor cutting edge, let's admit it, no one goes 'oooh!! You own a toyota' but people do aspire and get reactions on owning either a bmw, Audi or a merc.
Returning back to the topic, will the prices drop? I don't think so, seeing that Audi and Merc sold more than 10000 cars last year, it means there are enough people willing to shell out the molah. Let's look at it like we see Apple. Is Iphone really worth it??
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Old 26th July 2015, 19:52   #140
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

As long as buyers accept the German trio as "Aspirational", they will be priced accordingly. The best form of protest is not to buy them, but do people do that? No, they will buy an expensive car, just to prove that they can, and the seller knows it.

Time was when Mercedes was a sturdy reliable car. Times have changed, but not the perception. As long as the market can bear it, the prices will keep rising. Let the market react adversely and the prices will drop.

Regarding pricing in India, if you compute the taxes imposed on cars at each stage of manufacture (yes there are excise for bought out components and import duties for imported items), then it will be more than 50% of the final price you pay. Factor that in, and you will be very near the US prices.

As far as Toyota pricing goes, people are willing to pay for the reliability, hence their higher prices. If no one was interested in Toyota, their volumes would plummet and you may expect lower prices. The Fortuner is not an SUV in the classic sense, Prado is, but it costs much more, hence the popularity of Fortuner, even though people may say that both offer the same 3L engine.
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Old 26th July 2015, 20:14   #141
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

Affordability is relative to one's wealth and willingness to spend on a car. At current situation, I feel the german trio doesn't hold the value for money proposition; instead they hold only aspiration value. Cars like Cruze and Elantra denote VFM. But on the other side, If I were Super rich, I would have concluded the german trio to be immensely Value for money cars rather than going in for the Rolls Royce or Bentley which at that state would have carried the image of aspirational cars. Then for sure, I wouldn't even have looked at Cruze or Elantra.
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Old 26th July 2015, 20:56   #142
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Default The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

I don't think the Germans have hiked prices atrociously. The price hikes are a function of inflation in India, the fall in the INR making imported parts costlier, and higher taxes including OTT that hits on the road prices. Local assembly in these cars won't bring prices down - remember that the local assembly involved setting up sub scale manufacturing units, with lots of the highest value components being imported. While I don't know this for a fact, I strongly suspect that BMW's 50% local content includes the full value they pay Force for engines, ignoring engine components and the ECU etc that Force imports from BMW (would be great if someone can confirm that). In short, CKD / locally assembled versions of these cars will cost only marginally below a CBU import, and often more than the zero tax global price plus local duties. That's not unique to India - in China, luxury cars bought in the USA and shipped in unit quantities to China are cheaper after paying import duties than locally assembled equivalents. (They don't have the homologation rules which make parallel imports to India tough + they are a LHD market, giving them access to cheaper cars than the RHD ones that come to India).
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Old 26th July 2015, 20:57   #143
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

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Originally Posted by GKR9900 View Post
. All some people care about is the badge on the hood, and they're ready to shell out a bomb to acquire that badge. Surely, it's personal decision to determine what to do with one's own money. But, how many of these non-petrol head German car owners care about the specs underneath their priced possessions?
Few instances I can recall,
I just fail to understand what is wrong with that. You mean people can't appreciate a car if they don't care or understand the specs? All this "value for money" discussion is pointless. Value for money is in the eye of the beholders. My wife has not interest whatsoever in the specifications of a car. But she is very specific about what car she wants. Does that make her choice of car better of worse then mine then somebody who does?

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So I guess car companies are on one hand justified in taking advantage of this mentality, but I find it insulting. I cannot see myself spending money on such a nickel and dimed product.
Then don't, do you still feel insulted. Its not as if they are actually doing something to you against your will is it?

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Originally Posted by Aroy View Post
As long as buyers accept the German trio as "Aspirational", they will be priced accordingly. The best form of protest is not to buy them, but do people do that? No, they will buy an expensive car, just to prove that they can, and the seller knows it.
I said it before, nothing wrong with that. Again, why would that not be a very valid buying critiria. Obviously, it isn't a relevant criteria for you, but I don't see why it is a worse criteria then anything else? If it matters for that individual and makes him/her happy, go for it I would say!

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Originally Posted by Aroy View Post
Regarding pricing in India, if you compute the taxes imposed on cars at each stage of manufacture (yes there are excise for bought out components and import duties for imported items), then it will be more than 50% of the final price you pay. Factor that in, and you will be very near the US prices.
Not sure why we are comparing Indian prices to the USA. Try and comparing it to countries such as the Netherlands, Sweden, Norway, France and you might think very, very differently.

I think I said this before in another post. When we lived in Kansas City, all the mummies in the suburbs drove a Range Rover. They had no clue what engine, that it was a four wheel drive etc. etc. But that's just what everybody did. On the schoolrun it was wall to wall mummies with RangeRovers. Now, I love RangeRovers and I can give you easily at least 500 reasons why I would love to own one. The mummies only had one. The other mummies all drove Range Rovers.

I don't think its appropriate to call their buying criteria poor, or mine better for that matter, its just different. Its the same with these prices of German cars. You think its to expensive, don't buy it. It's not a good or a bad choice, its just your individual preference. Why would anyone feel insulted or get uptight about something that you can so easily avoid? I don't get it.

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Old 26th July 2015, 22:00   #144
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My 2 cents is if you put the aspiration aspect out and strictly speak in monetary terms I don't even see the Logic in the fortuner and Innova pricing because their sales volumes in a month is what the German brands achieve in a year. With those kind of volumes isn't the price supposed to be lower? The fortuner AT 4*4 is well over 30 lakhs OTR in bangalore and i paid 36.5 Lakhs for my X1 here. For that price what I got is a sweet 2L engine with more power on tap than the fortuner, a gear box which I think is well ahead of the one in the Toyota and lot of other niceties that the Toyota doesn't have. This thread has become a German vs Toyota one because of the difference in perspectives of people when it comes to value.
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Old 27th July 2015, 09:16   #145
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

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Time was when Mercedes was a sturdy reliable car.
As far as Toyota pricing goes, people are willing to pay for the reliability, hence their higher prices.
Mercedes still make sturdy, reliable cars. My dad has been driving a C-class since 1994 (when the C-class was first introduced). Since then we have changed over 20 cars (C-class, E-class, ML-class and SLK-class). No issues with any of them. We currently have the new C250 bluetec and ML350 bluetec, and both have been driven extensively over long distances here (in fact just did Melbourne-Adelaide last week in the ML), without any issues.

Toyota is no more reliable than the average Mercedes. In fact there have been several recalls here from Toyota, and the perception that Toyotas are bullet-proof is no longer true, at least among the car enthusiasts in this country.

https://www.recalls.gov.au/content/i.../itemId/952857

https://www.recalls.gov.au/content/i.../itemId/952860


Off topic: Just curious (and sorry for my ignorance) but the Mercedes cars sold in India, are they built in India?
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Old 27th July 2015, 09:47   #146
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

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Mercedes still make sturdy, reliable cars. My dad has been driving a C-class since 1994 (when the C-class was first introduced). Since then we have changed over 20 cars (C-class, E-class, ML-class and SLK-class). No issues with any of them. We currently have the new C250 bluetec and ML350 bluetec, and both have been driven extensively over long distances here (in fact just did Melbourne-Adelaide last week in the ML), without any issues.

Toyota is no more reliable than the average Mercedes. In fact there have been several recalls here from Toyota, and the perception that Toyotas are bullet-proof is no longer true, at least among the car enthusiasts in this country.

https://www.recalls.gov.au/content/i.../itemId/952857

https://www.recalls.gov.au/content/i.../itemId/952860


Off topic: Just curious (and sorry for my ignorance) but the Mercedes cars sold in India, are they built in India?
Surely you will agree, the Mercs developed niggles at the end of the 90s and the early 2000s with the tie up with Chrysler. That was also when a lot more electronics were added. The W210, and W220 were a stark contrast from the W124 and W140. And the 2nd generation ML, it had so many issues. Its only in the past couple of years that I see Merc going back to its old days in terms of reliability.

In the Indian subcontinent I would say that the Europeans do lag behind the Japanese a little bit in terms of reliability, only because the Japanese cars take abuse, and our dusty and humid conditions better. Personally my Europeans have been as reliable as any Japanese cars I've owned before.
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Old 27th July 2015, 10:13   #147
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

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Surely you will agree, the Mercs developed niggles at the end of the 90s and the early 2000s with the tie up with Chrysler. That was also when a lot more electronics were added. The W210, and W220 were a stark contrast from the W124 and W140. And the 2nd generation ML, it had so many issues. Its only in the past couple of years that I see Merc going back to its old days in terms of reliability.

In the Indian subcontinent I would say that the Europeans do lag behind the Japanese a little bit in terms of reliability, only because the Japanese cars take abuse, and our dusty and humid conditions better. Personally my Europeans have been as reliable as any Japanese cars I've owned before.
Maybe some of the Mercs in the early 2000s had issues, but personally we never had any issues with any of our cars. In fact our 2002 C-class (W203) had close to 200,000 kms before we sold it in 2005 and the only issue the car had was that the right indicator went out a week before we were due to sell it! (Had to replace the bulb).

Yes, what you say is true though, nowadays the Europeans have become quite reliable. I drive a 2012 Alfa Romeo Giulietta as an everyday drive, and when I went to buy it a lot of people said I will have many issues, Alfas are unreliable etc etc, but I bought it anyway! Just crossed 90,000 kms a few days ago and again, no issues with it at all. I get it serviced as per the schedule from an authorized service centre and that's it. I've driven the car on many dirt roads and in very hot/humid conditions as well without any problems (I took it up north in summer last year, humidity close to 90% and temperature 45C!).
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Old 28th July 2015, 14:43   #148
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

Yesterday (27th July), there was an advertisement in ToI Bangalore by Audi, offering attractive prices
A3 - 23.xx lakhs
A4 - 34.xx lakhs
A6 - 39.xx lakhs
Q5 - 39.xx lakhs

All prices were Ex-showroom and surely for lowest trims, still it looked mouthwatering.
Does anyone know more about this, is there a catch?
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Old 28th July 2015, 15:45   #149
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Default Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi

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Yesterday (27th July), there was an advertisement in ToI Bangalore by Audi, offering attractive prices
A3 - 23.xx lakhs
A4 - 34.xx lakhs
A6 - 39.xx lakhs
Q5 - 39.xx lakhs

All prices were Ex-showroom and surely for lowest trims, still it looked mouthwatering.
Does anyone know more about this, is there a catch?
Audi's sisters - VW and Skoda will be launching their premium sedans in India early next year. Passat I hear will be in by Feb 2016 and its pricing will be around 40L. So, my intuition is that these attractive prices are to lure people and skim out the maximum purchases.

Last edited by Accent Martin : 28th July 2015 at 15:47.
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Old 28th July 2015, 15:57   #150
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Talking about price hikes by German car makers,

I had bought the 4th year extended warranty for my Gl 350 cdi late last month for around Rs. 78,000.

Later I am told by the service advisor that I am in luck that I bought the warranty & service package for the Mercedes in time as Starting this month (July 2015), the prices for 4th year extended warranty has been increased to about 1.7 lacs.

That is what I was told in the phone & I am yet to go there to confirm.
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