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Old 23rd August 2015, 23:48   #76
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Originally Posted by eyesice View Post
I believe that there should be a good used car market. I remember that during my visit to New Zealand almost all of the cars sold were used cars from Japan. The manufacturers themselves had showrooms of used cars instead of separate brands like Maruti True Value or Mahindra First choice.

I guess once the used car market matures in India, everyone will be able to afford good cars with decent build quality, power and safety.
The used car way isn't that feasible here in India, simply because the used car market scenario here is totally different as opposed to the used car scenarios abroad, in developed countries.
Most importantly the road conditions, the way people use cars, the quality of maintenance and car care, the uneven weather in a lot of places, traffic habits, all factors that don't keep a new car good enough after a while, and affect an older car even more, especially degrade the experience of a used car owner. Plus, cars sold in developed nations follow strict quality and safety standards, whereas here we've got inferior quality or generation-old models just with facelifts, or some chrome and beige added on. The performance, emission and safety standards though are usually nothing to write home about. So the chance that most cars will last well enough to keep a second owner happy isn't too much in most cases anyway. Neither do the newer 'compact' sedans and SUV's have anything special to tug at a buyer's heartstrings.
One of the very reasons someone buys a used car over a new one is that he wants to have a more high quality car, or a better ownership experience, or better image, or doesn't want to settle for a compromise, though without having to break the bank.
Naturally, some the most popular or sensible used buys in India - Honda City, Swift, Santro, Verna, Fiesta, Innova, Bolero, Scorpio, Civic, Octavia, Corolla, etc. or at the higher end, the Accord, CR-V, Fortuner, C-Class, 3-Series, E-Class, etc. all reflect on that. They're all proper genuine cars, built for a purpose. They might either have solidity and reliability to ensure peace of mind, or may have a specific ability like people carrying, or off-roading, or both, or maybe good performance and dynamic credentials (Fiesta 1.6S or VRS Octy for instance).
I just can't imagine someone wishing to buy a used Hyundai Xcent or Mobilio or Ecosport or i20 active, or their respective segment rivals, that try to be compact, spacious, frugal, stylish, premium, and affordable all at the same time. And manage none very well in the process. One would rather go for an older midsize sedan or proper SUV/MPV for a very similar price instead (which is usually not an option for new buyers, given price gaps). At least that would mean the buyer won't drive something used, that screams 'compromise'.
Even at the high end, where the typical used car buyer would still be eyeing a car as his primary ride, if not his only ride, would have little to look past the compact CLA, A3, Q3, GLA, X1, etc, that can't even seat five properly, or cross even potholes without worry, but are still sold as 'luxury' cars or 'SUV's'. Again, VW group premium cars may not find high prices due to poor service, Hyundai due to image, only Toyota cars may still sell used for strong money.
I guess the only current cars under a million Rupees that may command a high resale value in future are the Swift, i20, maybe Jazz and possibly even the new i10. And that because they're all genuine cars on their own, not India-specific, (read world class), and most importantly, are not imposters.

Last edited by mukul32 : 23rd August 2015 at 23:59.
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Old 24th August 2015, 16:07   #77
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Default Re: A segment shift in the Indian car scene - So many cars now priced a level above!

Interesting thread; very real and very scary.

Makes me feel a tad pleased that I'm not buying a car now.
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Old 24th August 2015, 16:40   #78
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Default Re: A segment shift in the Indian car scene - So many cars now priced a level above!

Considering the inflation of 8%, in ten years time, a product that cost x today would cost 2x. i.e. An Alto that is sold for 4 lakhs would cost 8 lakhs for example.
However, increasing prices every year, would hit the sales of manufacturers, as the customers would find the cars pricey. So, they would resort to re-engineer the costly equipments, and throw in more cheap features that would attract the customers.
If the A segment cars were allowed to sale as it is, without any change and nothing is done about the Crash tests, they would continue to introduce materials that are cheap, and are relatively less safe.
They would rely on concepts (ribbed roof concept etc), rather than solid build. More reliance on turbos, rather than the actual engine displacements. There are already rumours coming out about the Next gen Alto to have 658cc rather than the 800cc.
Probably we might have some inexpensive features that can be lifted from higher segment cars and put into such cars with cheap materials, at low price due to mass production.
We shouldn't be surprised, if we get a roof similar to that of auto rickshaw's top in few more years of build quality watering down.
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Old 24th August 2015, 17:21   #79
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Yes the "soft top" cars will be the next rage (probably from bajaj) with uncanny resemblance to an auto-rickshaw's top! 😀
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Old 24th August 2015, 19:57   #80
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Default Re: A segment shift in the Indian car scene - So many cars now priced a level above!

This is purely the result of high inflation. Over the past decade India has faced atleast a 8/10% inflation rate in real terms. A bit of this is cushioned by increase in real income or disposable income but largely the lower middle class and the Middle class has felt the shock of price rise. Consider this. A decade back Rs 100 would have bought you almost a weeks worth of vegetables, now the same sum can hardly purchase a days worth at the most.

The same thing is reflected in car prices albeit to a smaller extent due increased competition. Hence we are seeing a price rise of only one segment. If real inflation was considered an alto should have costed atleast 8/9 lakhs today. So how have the car makers kept the prices low? A combination of contract labour, higher automation, depreciated machinery, rehashed old models and rabid cost cutting. A simple comparison of a 2003 Alto with a 2015 model will show by how much has the sheet metal thickness decreased!!!
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Old 2nd September 2015, 19:13   #81
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Prices have been controlled because of more efficient manufacturing as well as perhaps cheaper raw materials, but the Indian car industry still ignores even the simplest safety features like airbags (at least in most cars sold) in order to keep the costs down.

They're basically reacting to our demand for "features" at the price of safety.
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Old 14th September 2015, 02:02   #82
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Default Re: A segment shift in the Indian car scene - So many cars now priced a level above!

Originally Posted by Bhodrolok View Post
Err. it is already pretty "liberalised", the major difference being that the entry barrier into car manufacturing isn't as easy as a cell phone manufacturer using a third party like Foxconn? also we have always had the micromax & xiaomi of cars in our country, Maruti which sells on features at a lower price at the cost of quality build and safety
Well, in the car market we have the el-cheapo but VFM abroad Dacia Duster being sold off as a "premium" SUV badged as a Renault and a Nissan. And it's competitor Ecosport that needed 500 design changes to be compliant with Western safety norms. So we know which way the wind is blowing. That way, the Alto makes a lot more sense- a tried and tested design being upgraded incrementally. And it is safer than a two wheeler in every way.

Even then, the design changes that are happening are dubious. Take headlights for example: The best headlights is the parabolic reflector- ever faced a Tata Ace or the new bajaj auto with their high beams? But even the lowly Ace had the headlamps "upgraded" to more stylish plastic units with the current refresh. While the earlier ones were glass and metal (and hence covered by insurance) and cost ~ 100 bucks apiece, the new ones are plastic (and hence uninsured) and would cost a lot more.

Originally Posted by mukul32 View Post
Yes our market does need a fresh outlook, but not the Xiaomi way, with attractive looking products on paper, often with questionable quality, horrible service, and ugly user experience (miui),
but rather the Apple way.

There should be this one standard top selling brand across segments that offers high quality, high standard, and well optimised cars to satisfy the users, with safety and quality as a priority and no corners cut. And yeah, genuine cars. Not one type of car in disguise of another. What you see should be what you get, even though it may be priced slightly higher than average.

And most importantly, this brand should capture the hearts of the common public, who don't understand the geeky stuff. They should aspire to own the genuine world class cars at any cost, and those who own them should feel proud about them and show them off to those who don't, which in turn would make the others want to own them even more.

In fact, this pride-aspiration way is the only way high quality world class cars can sell in our country, and the quality standards of the market improve. In any other case, they will feel overpriced and low VFM compared to Indianised cars having some creature comforts and design accessories instead of better safety kit for the same money.

Not that Apple phones are very great, they're just too locked down and boring, and need to much money for everything, but ultimately, they just work. Almost every single time.
And I'm sure this strategy would work like a charm in the automotive industry.

But as of now, there aren't too many contenders for this role. There is Volkswagen, or Toyota, who have quality, engineering and brand value, but I don't see them getting to the top so soon. Others are Honda, Hyundai, maybe even Ford or Renault, or best - the German luxury trio, if they do decide to move a couple of segments further down the rungs, in our market.

Now to find our own version of Steve Jobs...
The "aspirationals" are best exemplified by a friend of mine who used to carry a Blackberry and an iPhone without a data connection in either of them. Given the state of the roads and the traffic in our country, current western technology is simply INCOMPATIBLE. Take out any of your beloved German beauties for a spin in the rain and you will know. Last time I drove in the rains I saw an Audi and a BMW stalled in about 1.5 feet of water which my 800 used to wade through without a complaint. They are also known to leave souvenirs every time they meet a bump or a pothole. And their delicate appetites have no place for what is sold as automotive fuels outside the metros.

Compared to them, the Tatas, Mahindras and the Marutis (the Micromaxes of the auto industry) have consistently sold products which aren't flawless but dependable. Of course, a Toyota LC will be superior to all of them any day, but then Toyota is not an "aspirational" brand anywhere in the world- they make workhorses and are known as such.
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