Protectionism, Indian Car Pricing, Development Economics etc

[khanak]

Originally Posted by flyingspur

An Alto-D, if made to respectable standards, would have cleaned up the Indica. But of course thats not possible for an Alto. You're conveniently avoiding any comparision between an Indian made car and a car R&D'd and produced outside India. That would serve as a fair comparision for this point, dont you think?

When the Tatas wanted to enter the passenger car market, they were considering producing Accords instead of developing their own car. The government said no and they were forced to produce the Tata Estate. They made and learnt from a lot of mistakes made with the Estate and went on to make the Indica. Again they kept improving on the Indica and Im sure the second generation Indica will be in a better position to compete with a car R&D'd abroad than the Estate. The point I am trying to make is that Indian companies needed time to grow and learn. We needed to rebuild our economy. We have been doing so since Independance and now we are in a position to open up our economy and compete with the world which is what we are doing.

Now think about this, instead of making the Estate, if Tata went ahead and imported Accords into India without any duty, people would have loved it. However we would remain dependent on a foreign company to produce the Accords, We would rely on foreign R&D. Indian workers, managers, engineers would all have no work. Money that we earnt would be sent outside the country to pay Honda and our country would become poorer and poorer.

[flyingspur]

Originally Posted by khanak

Now think about this, instead of making the Estate, if Tata went ahead and imported Accords into India without any duty, people would have loved it. However we would remain dependent on a foreign company to produce the Accords, We would rely on foreign R&D. Indian workers, managers, engineers would all have no work. Money that we earnt would be sent outside the country to pay Honda and our country would become poorer and poorer.

Quite true. But it's also quite sad that we're in this position. Because in the car markets overseas, nationality and national economy have really taken a step backward when it comes to giving takeovers (not all successful, I know), tech-sharing and JV's the top priority. Anyway your points are valid. Lets hope things improve with time w.r.t. both our perspectives right? Indian cars getting good enough to compete globally, and the Import regulations being relaxed.

[khanak]

Originally Posted by flyingspur

Quite true. But it's also quite sad that we're in this position. Because in the car markets overseas, nationality and national economy have really taken a step backward when it comes to giving takeovers (not all successful, I know), tech-sharing and JV's the top priority. Anyway your points are valid. Lets hope things improve with time w.r.t. both our perspectives right? Indian cars getting good enough to compete globally, and the Import regulations being relaxed.

Im not quite sure what you are trying to say. Are you trying to say tha abroad you buy a car because it is technically superior and not because the company belongs to your country?

[jesal]

the way i see it if taxes were normal like everywhere i would be driving a 3 series by now for sure than a honda city that i am right now. i dont care about protecting tata and maruti for god crying out loud. all countries make cars sell them and have tax systems too they bring out their own cars to the world as well. in india for kicks make taxes so high that a person calls a mr2 a ferrari also because there is lack of knowledge. everything red is automatically called a ferrari here. damn even bangkok is better than india man. all the cars are there have the roads and everyone knows how they make their MAIN money. i am by no means against taxes but do not see how so many officers in government have such nice cars and i do not. though i pay close to 1 lak more becuase of so called company TAX in registration. and wonder where it goes....

[flyingspur]

Originally Posted by khanak

Im not quite sure what you are trying to say. Are you trying to say tha abroad you buy a car because it is technically superior and not because the company belongs to your country?

"....when it comes to giving priority to takeovers...."
I dont know how better to explain my point. Never mind.

[jesal]

Originally Posted by flyingspur

I do agree with you Jayabusa, I really do. But its not fair that we keep buying inferior and sub-standard cars all our life to protect the local businesses! I know it's not that bad but Tata and Maruti will never be Honda and Toyota. The people who are buying Hondas and Toyotas are the ones who could have actually been able to afford the Germans (for example) if the duties were not in place. You really cant run away from the fact that Mercs and Bimmers and Audis would be far more accessible to hardworking/wealthy people who can afford them (of course that term is just subjective)!! 100%+ duty is absolutely ridiculous. Somewhere, the fine balance must be struck.

Meanwhile, on the topic of licence plates, I noticed this Dzire near Juhu Centaur. I've tried to keep as much of the plate visible as possible, to highlight my point. What sort of a plate is this folks?

Attachment 11616

fake / temp plates, buy the car from GJ get them to MH and reg them here, even i did the same, but u have to pay octroi, in my case i did car does cheaper to buy though. i saved a decent amount, i was buying a G spec innova from bombay got a V spec innova from GJ same price i think

[ajay99]

Originally Posted by jesal

the way i see it if taxes were normal like everywhere i would be driving a 3 series by now for sure than a honda city that i am right now. i dont care about protecting tata and maruti for god crying out loud. all countries make cars sell them and have tax systems too they bring out their own cars to the world as well. in india for kicks make taxes so high that a person calls a mr2 a ferrari also because there is lack of knowledge. everything red is automatically called a ferrari here. damn even bangkok is better than india man. all the cars are there have the roads and everyone knows how they make their MAIN money. i am by no means against taxes but do not see how so many officers in government have such nice cars and i do not. though i pay close to 1 lak more becuase of so called company TAX in registration. and wonder where it goes....

Please dont compare dirty(cultural) Bangkok with INDIA.
Actually in the view of many, the import duty should be raised to at least 200%. If you want to drive a 3 series or 7 series, nobody prevents you from doing so.Just imagine the situation if 3 series was available for sub10 Lakhs!!!.Then 3 series would not have the same prestige it has currently and you may crave to drive a M3 or more pricey models. please remember Exclusivity is the name of the game. regarding roads INDIA is a country with lot of poor people and for them FOOD, WATER, Shelter are the first priority,NOT 5 star roads !!!!

[speedzak]

Originally Posted by ajay99

regarding roads INDIA is a country with lot of poor people and for them FOOD, WATER, Shelter are the first priority,NOT 5 star roads !!!!

From your post, 2 things come up in my mind.
1. Your priorities doesn't seem to be fulfilled anywhere in our country in a very good scale. We can take our own state, Kerala as an example (where there is very less ratio of poor and hunger compared to most other states in our country). Do you think our hard earned taxes have done much to help the poor and solve their hunger?
2. We neither do get good roads for the taxes we pay. Do you think the taxes we have paid from our hard earned money is being used for good?

Other than this, I have seen that 1st step to development of a village/town/settlement is to have a proper infrastructure to reach there. Once there is a good road to reach there, the conditions of that certain place will change for good. Slowly, there will be more and more opportunities pouring in. So, the thought against good roads will do us no good in my opinion.
Yes, just my 2 cents!

To put things back in topic, many imported car dealers like Choksi etc.. gets support from the Junta not just because it saves a lotsa bucks, but also the disappointment and hopeless thought of their tax amount going to waste. And that tax didn't just fall down from the sky. Even these millionaires who import all the expensive cars also earned their penny, quid, paise etc.. by spending their valuable time, money, sweat and blood. Is it that easy to let it go for nothing?

[spawnofsatan]

Originally Posted by ajay99

Please dont compare dirty(cultural) Bangkok with INDIA.
Actually in the view of many, the import duty should be raised to at least 200%. If you want to drive a 3 series or 7 series, nobody prevents you from doing so.Just imagine the situation if 3 series was available for sub10 Lakhs!!!.Then 3 series would not have the same prestige it has currently and you may crave to drive a M3 or more pricey models. please remember Exclusivity is the name of the game. regarding roads INDIA is a country with lot of poor people and for them FOOD, WATER, Shelter are the first priority,NOT 5 star roads !!!!

This is the last post I am posting that is OT, sorry mods.

@Ajay, the base model 3 series are NOT meant to be prestigeous cars, they are supposed be commuter cars that are very well made and drive well, I love BMWs and Prestige only comes with cars that are maybe 7 series and above. If you do not want to compare India with Bangkok, how about comparing it with Germany, or China or any other country? If they can drive a BMW or C-class at around 10 lakhs then why not us? whats the inequality about?

[iraghava]

Originally Posted by khanak

The point I am trying to make is that Indian companies needed time to grow and learn. We needed to rebuild our economy. We have been doing so since Independance and now we are in a position to open up our economy and compete with the world which is what we are doing.

Khanak - If you look at the present scenario (USA) & history (UK) you'll notice that if the company & it's products are not good enough, no level of Govt. protection is going to save them. Classic examples are the British car industry which were the leader during the 50's/60's with successful & flourishing brands like Jaguar/Rover/MG/Triumph/RR/Bentley/Mini/Austin/Land Rover etc. They were among the world leaders during their time & even then today not one of them is British owned & a lot of them are defunct. Similarly look at the trouble the American industry is in now, they are struggling for survival.

Point is if the products you produce are not good enough then in the long-term nothing can save you, no matter how favourable the Govt. policies are. Sooner or later one is going to have to implement the WTO rules (current scenario) & that is when the real challange will come when companies will be able to introduce competitive, modern cars at competitive prices. That is when our domestic car makers will really feel the heat & we as consumers will have real choice of state-of-the-art vehicles.

Consider this, we're today exporting cars like the Santro/Getz/Alto etc. to developed countries since we produce them cheaper & the import duty there is minimal. What if tomorrow those countries decided like us to implement heavy duties on importing cars? Won't that mean a loss of business & revenue for our manufacturers?

[jesal]

im out of this thread too many people and their love for this country fail to see that their protection and ignorance is driving the country itself no where. i dont want bmw to be a prestige brand i want it standing like a normal car. is bmw 3 series prestige anywhere else in the world no so then why india. is it some ubercool country that deserves it. forget this argument goes no where in the end people will go like if u do not like the country leave it but that is the lamest one i have heard.

[khanak]

Originally Posted by iraghava

Khanak - If you look at the present scenario (USA) & history (UK) you'll notice that if the company & it's products are not good enough, no level of Govt. protection is going to save them. Classic examples are the British car industry which were the leader during the 50's/60's with successful & flourishing brands like Jaguar/Rover/MG/Triumph/RR/Bentley/Mini/Austin/Land Rover etc. They were among the world leaders during their time & even then today not one of them is British owned & a lot of them are defunct. Similarly look at the trouble the American industry is in now, they are struggling for survival.

Point is if the products you produce are not good enough then in the long-term nothing can save you, no matter how favourable the Govt. policies are. Sooner or later one is going to have to implement the WTO rules (current scenario) & that is when the real challange will come when companies will be able to introduce competitive, modern cars at competitive prices. That is when our domestic car makers will really feel the heat & we as consumers will have real choice of state-of-the-art vehicles.

Consider this, we're today exporting cars like the Santro/Getz/Alto etc. to developed countries since we produce them cheaper & the import duty there is minimal. What if tomorrow those countries decided like us to implement heavy duties on importing cars? Won't that mean a loss of business & revenue for our manufacturers?

I agree, Nothing can help save a poorly managed company. Is Tata a poorly managed company? The point I am trying to make is that companies like Tata needed the time to develop themselves and make themselves competent. Some companies used the protection to their advantage and bettered themselves over time while some companies like Premier failed to develop themselves.

[ajmat]

Note from Mod - These posts have hijacked the Choksi being nicked thread. This warrants a new topic so posted here

[flyingspur]

Originally Posted by jesal

im out of this thread too many people and their love for this country fail to see that their protection and ignorance is driving the country itself no where. i dont want bmw to be a prestige brand i want it standing like a normal car. is bmw 3 series prestige anywhere else in the world no so then why india. is it some ubercool country that deserves it. forget this argument goes no where in the end people will go like if u do not like the country leave it but that is the lamest one i have heard.

Exactly jesal. No one here's getting the point that something like the 3-series is a prestigious car only in India because of the duties !! And Safari's are being compared to Innovas instead of SUVs, patriotism is totally clouding better judgement of the situation. I really doubt there's any correlation between what one person's trying to say and the comparisions/rebuttle being brought forward to counter it !!

[1100D]

My Original point was that Accord money gets only a Fiesta in India (You pay 5 series money for the Accord). Even domestic market cars are taxed crazy, based on the logic that just 7 out of 1000 people own cars. Instead of trying to get that number to look better, you tax those measly 7 heavily.

Now to create a difference between cars brought domestically from the ones being imported, well, tax them even heavier (taking for granted that the difference should be there).

Then create loopholes within EPCG and TR so that people like Choksi exist. Take a percentage from his earnings. Everyone is happy.

The root cause is actually the thinking that still continue to tax cars (domestic or imported) heavily on some archaic premise that cars are a luxury.