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Old 16th September 2016, 11:34   #31
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Default Re: Car pricing and the importance of getting it right at launch!

I am not loyal to any brand and given the competition in the market (say for last 5 - 7 years), almost all players have introduced good products for Indian buyers. Gone are they days when you chart out your requirements before heading to the showrooms for lookout of cars and find just one or two players meeting / coming close to your requirements.

I can safely say that for each segment we now have at least 5 competing products, and below 5 lac, the product portfolio changes at every INR 50K while between 5 Lac and 10 Lac the product portfolio changes at every INR 100K

Safety, Auto transmission and allied creature comforts are also getting into mainstream with companies offering products matching the buyer wish list now. The buyer is no longer required to look at a product and see what it offers and instead find a product that meet its requirement - from sellers market to buyer market.

Though this transformation has happened, making profits is in the DNA of companies and that results in price fiasco many a times, when a global player merits its sheer international size, global market share etc. as an important indicator for price discovery in Indian market and things start loosing steam.

Maruti can do it because its Indian market share is fair representation of its global strength, Hyundai also because India contributes significantly to its global market capitalization. For others, it has to be India specific pricing strategy without boasting the global lineage, heritage, market share etc.

I would say the strategy adopted by Ford at the time of launch of Ecosport and Tata for Tiago are correct - sense the market, taste success, increase price. I am very happy to see that Tata is able to increase price of Tiago without impacting its VFM perception, which Ecosport lost somewhere in between.

I was talking to a friend about Ecosport few days ago, and he is of the opinion that in case of Ecosport, it is not just the price but how they reduced the features (dropping keyless start stop in Titanium and few other features) that took away several potential clients away from them, these features are back again.

Certainly making a good aspirational product and pricing it right is something that every player grapples with these days and there is no set formula for it.

Last edited by i74js : 16th September 2016 at 11:42.
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Old 16th September 2016, 11:35   #32
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Default Re: Car pricing and the importance of getting it right at launch!

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Originally Posted by cooldude1988765 View Post
But I can assure you that Ford will not be paying more than 140% duties.
It's actually a lot more. Take a look at the duty structure here.

Car pricing and the importance of getting it right at launch!-capture.jpg
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Old 16th September 2016, 11:59   #33
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Default Re: Car pricing and the importance of getting it right at launch!

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It's actually a lot more. Take a look at the duty structure here.

Attachment 1554815
GTO, there seems to be a minor error in the calculation or the formula

A+B+C+D+E+F is actually 315498.93
The Total Customs duty 214498.93 does not include A.

I get the context that the actual duty comes ~215% but wanted to point out the minor error.

Edit: Just realized that the error was from the portal that was used to calculate the duty and not from GTO

Last edited by Vigkey : 16th September 2016 at 12:06. Reason: Actual reason for the mistake
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Old 16th September 2016, 12:54   #34
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Default Re: Car pricing and the importance of getting it right at launch!

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The previous-gen Jazz - great hatchback, same story. The Jazz had a unique case where its pricing was suicidal, but it increased the sales of a competitor - the i20 . The i20 became 'THE i20" only after the Jazz' pricing debacle.
The Chevrolet SR-V too maybe included in the list. A car ahead of its time as well as on price.
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Old 16th September 2016, 20:58   #35
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Default Re: Car pricing and the importance of getting it right at launch!

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Originally Posted by GTO View Post
It's actually a lot more. Take a look at the duty structure here.

Attachment 1554815
Thanks for correcting me dint know there is a CVD component that is 30%

Last edited by cooldude1988765 : 16th September 2016 at 21:00.
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