Protectionism, Indian Car Pricing, Development Economics etc

[srishiva]

--- The S Class is assembled in India isnt it? What would happen to an Indian made Civic if you could buy a 3 Series for 15 lakhs? ----

Nothing would happen. People would not be buying hatchbacks and would buy Civics instead.

[extreme_torque]

The bottom line is If the political class is not going to change nothing in this country will ever change. We have been suffering and we will continue to suffer the same way and how I would love if someone amomgst us went out and did something intead of just cursing the government.... get into it and change it! As simple as that.

Food for thought: The CRV and its equivalent BMW X3 model have a difference of around 4000 pounds and while both are imported as CBU's in India, the cost difference b/w them is more than 20 lakhs here. How do 4000 pounds amount to more than 20 lakh rupees. Argh.. I hate these Germans!

[extreme_torque]

Originally Posted by khanak

The S Class is assembled in India isnt it? What would happen to an Indian made Civic if you could buy a 3 Series for 15 lakhs?

My question to you is why does an Indian Made civic costs that much figuring in cheaper everything (salaries, transportation et all..) compared to the developed world?
If they are making a fortune selling every car in the name of protectionism who is the looser here?

[bhanusrinivas]

My question to you is why does an Indian Made civic costs that much figuring in cheaper everything (salaries, transportation et all..) compared to the developed world?
If they are making a fortune selling every car in the name of protectionism who is the looser here?

I agree with you, its the GOI that is to be blamed to a major extent, then comes the manufacturers

Coming to the protectionism,
how many countries in the world has their local companies manufacturing automobiles?(Japan, Germany, Italy, France, Sweden, USA, UK, Korea), when the rest of the countries hasn't imposed any such protectionism, why was it in India? Just to protect Tata and M&M, we, the end users had to lose so much, if the govt was so true to its protectionism, they should have encouraged some more companys like Tata and M&M
or is it in the intrest of MUL that they didn't allowed others? or is it because of the taxes they are enjoying now without even providing any infrastructure?

and its the companys that are ripping us off, which are charging us a bomb, even after making them totally localised. Every car is initially coming here as an imported model with the 105% tax on it and based on the volumes they start to localise things, and the benefits were never passed to the end user.

[raul]

Its not just to protect domestic manufacturers but also encourage foreign manufacturers to manufacture or at least assembly here and thereby lead to employment and investments here and like IT that has roll on effect on the entire economy.

I am dubious about then entire import substitution business and how it was done in India since the 60's because rather than encourage home grown innovation it enriched connected businessmen who imported and offloaded 3 third rate technology in most sectors and often risky environmental polluting technology to make some quick money.

Indica was not the result of protectionism but full scale competition with foreign manufacturers already in India. Fiat and Ambassador were the result of protectionism. But there are many issues here, does the strategy work in improving he competitiveness of your industry or does it just make industry complacent and remove the need for innovation. Unless you are operating in a globally competitive marketplace there is little incentive to innovate in a protected economy when you can just get third grade stuff. However you just can't grow from zero to globally competitive, I think there is a way to balance these conflicting objectives with the right policies. Maybe Export promotion would have been a better strategy but this is all hindsight and this is a huge country with massive issues that require more skill, talent and expertise than probably many other countries and we all know we are lacking here, maybe not so much in framing policies but in implementing them.

The pricing of Indian car's is strange, on all parameters including purchasing power of our workforce, cost of labour and business in India and even taxes. Taxes are high but not so high to justify the huge premiums. Regarding volumes unless your price sensibly you won't get volumes so you can't prices let's say CRV or RAV4 at $50000 in US and then cry about volumes. US citizens have 10 times our purchasing power, labour and marketing and basic business costs are 10 times India and yet they get CRV for $20-25000. And we have to pay 20 lakhs or $50000, something is clearly off and only Honda India and other car manufacturers can tell us.

[nickatnite]

I think it is grossly unfair that cars cost twice as much as in India when compared to anywhere else in the developed world. Unfortunately , this is a country where the poor and the politicians are the only ones who are not burdened by high prices and taxes.The poor get rice at Rs.2 a kg and the politicians don't need to pay even Rs.2/-.The reason-The rest of the Indians carry their burden. That's why everything costs twice as much in India as opposed to anywhere else better off than India. Unless one wants to compare India with the Congo, or sub-Saharan Africa.The rest of the Indians deserve their fate because they don't have the guts to stand up and do something about it. My folks blame it on the heat and humidity. What's your excuse?.

[aravindwarrier]

Originally Posted by nickatnite

I think it is grossly unfair that cars cost twice as much as in India when compared to anywhere else in the developed world.

Agreed. Its ufair

Unfortunately , this is a country where the poor and the politicians are the only ones who are not burdened by high prices and taxes.The poor get rice at Rs.2 a kg and the politicians don't need to pay even Rs.2/-.The reason-The rest of the Indians carry their burden.

You are right again. But isn't it supposed to be so?(Barring the politicians of course) Hows is the folks living on Social Security checks being taken care of? That also is taxpayers money I Guess (Iam not sure what its called.Im just an ignorant Indian you know)

That's why everything costs twice as much in India as opposed to anywhere else better off than India. Unless one wants to compare India with the Congo, or sub-Saharan Africa.

Really? Very nice of you for sharing this valuable piece of information.And what are those which costs less in the so-called developed nations and more in India ?Digicams? Cars? Watches?Mobile Phones?

The rest of the Indians deserve their fate because they don't have the guts to stand up and do something about it. My folks blame it on the heat and humidity. What's your excuse?

I'm not being overtly patriotic nor is my blood boiling, but would like to tell you one thing.You are also not contributing by blaming things on fate and being sarcastic in an internet forum.And your myopic vision is not letting you appreciate the changes that are happening in the grass root levels, despite a severely impaired Govt:,Quasi Govt: Machinery we are having.

[bhanusrinivas]

Really? Very nice of you for sharing this valuable piece of information.And what are those which costs less in the so-called developed nations and more in India ?Digicams? Cars? Watches?Mobile Phones?

Today more or less everything costs equal or lesser outside compared to some of the cities in India,
simple example, office space in Sweden and California costs me lesser than that i have to pay in Hyderabad.

[extreme_torque]

Originally Posted by aravindwarrier

You are right again. But isn't it supposed to be so?(Barring the politicians of course) Hows is the folks living on Social Security checks being taken care of? That also is taxpayers money I Guess (Iam not sure what its called.Im just an ignorant Indian you know)

I am not averse to a poor guy getting rice or whatever at 2 Rs/Kg. The thing is, is he really getting it? The government machinery is a complete waste and if the poor guy isnt getting what he is promised at the cost of my money.... my money is being wasted and I have the right to be frustrated.

Originally Posted by aravindwarrier

Really? Very nice of you for sharing this valuable piece of information.And what are those which costs less in the so-called developed nations and more in India ?Digicams? Cars? Watches?Mobile Phones?

Almost everything dude.... do not convert dollars and pounds into Rs and say they are getting their stuff costlier than us. Compare it keeping in mind the salaries we get and the cost of things we buy. An average indian cannot afford anything more than 2 square meals a day and its a fact.

Originally Posted by aravindwarrier

I'm not being overtly patriotic nor is my blood boiling, but would like to tell you one thing.You are also not contributing by blaming things on fate and being sarcastic in an internet forum.And your myopic vision is not letting you appreciate the changes that are happening in the grass root levels, despite a severely impaired Govt:,Quasi Govt: Machinery we are having.

What changes are you talking about here? I see youth for equality coming out opposing reservation because it affects them directly, but none of them had the courage to stand up and say, that I will fight for this country if you vote for me. Why not bring the change instead of waiting for it? We are not progressing my dear... I still dont get clean water, 24 hour electricity, pothole free roads, clean environment and I live in the capital of this once great nation. I cant even imagine the pight of someone living in an interior village in UP.

[aaggoswami]

First of all, I am sorry for going offtopic.


But then there is what is my point. We are not only paying more for cars but also for fuels. And that is what is my point. My father works with reliance and I know what is refining and selling good fuel. IOC and other government suppliers along with government are simply too corupt.

I am sticking to one point of fuel, because if that is good many of our problems will be solved.

I agree with you all completely that why are we made to pay soo much for cars as compared to developed world.
Someone somewhere pointed out this protectetion ( that is doing us bad only ) policy to the late independence. Well, if you read all my posts in this thread, you will realize that Japan was almost ruined to Ashes after World War 2 and how the Mighty Toyota was basically born out of. They faced Nuclear Bombing in 1945, not long before our independence in 1947. They have the problem of EarthQuakes and space scarcity from day one after the 1945 incidence.

We never had space problem just after 1947. We never had serious earthquake problem just after 1947. Still Japan is way, way ahead of us.
Why? Its basically the Indian mentality. The indian thinking moral should or rather is suppossed to come up.

Then today it wont be toyota leading the world. It would have been TATA.

[sbasak]

I don't see any problem on current Indian auto industry. Compared to 1990s, now we already have lots of reasonably priced cars in our market.

Govt. of every country tries to protect its own people. For example, UK/USA have Work Permit/H1B schemes so that they can only allow few Indian techines to their soil.

Although, cars are fuel are comparitive expensive in India, many other things are far cheaper (compared to developed countries) - like cost of education, insurance, manual labour etc.

We cry why BMW is not cheaper in India and in western world people cry why stereo of BMW costs as much of a whole car (i.e. Nano)

We win some, lose some.

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

Good roads can bring water and food and more importantly jobs to lot of people

[aaggoswami]

I don't see any problem on current Indian auto industry. Compared to 1990s, now we already have lots of reasonably priced cars in our market.

Govt. of every country tries to protect its own people. For example, UK/USA have Work Permit/H1B schemes so that they can only allow few Indian techines to their soil.

Although, cars are fuel are comparitive expensive in India, many other things are far cheaper (compared to developed countries) - like cost of education, insurance, manual labour etc.

We cry why BMW is not cheaper in India and in western world people cry why stereo of BMW costs as much of a whole car (i.e. Nano)

We win some, lose some.

There is unending debate, but let me talk about the automotive industry.
Rather than have different segments of taxation like lenght and engine, why cant we have rule like Japan. Just fix size of engine and physical dimensions and then fix tax. Rather than have complex things.

What is the quality of education, insurance, manual labour, etc. Dealing with manual labour is 3rd difficult( the most difficult is Police/Politicians, 2nd comes indisciplined so called common man ). Agreed that its not their fault, but then in India arent they ( manual labour ) exploited to no end?

We cant argue in this fashion that we have relatively cheaper education actually I dont agree with that, inquire at any reasonably good institution for MBA fees and you will come to know ).

We need better roads, less tax on cars and fuels and simultaneously develop very effecient and clean public transport.

Its very very difficult, but not impossible. If we dont do it now, we will suffer. USA came up radically only after it made excellent highways. China made huge impact only after developing and implemention some of the most ambiitious raod projects.

We i.e our great Indian economy has suffered horribly with countliess loss of lives only because of bad roads. Had our roads been good, our ecenomy would be in a better state as would be we.

Charging excessively for cars is what is happening. As per your claim, we have cheap manual labour, still the cost of cars is so high wheather with less local content or more. And we dont get the full safety equipment like we do in developed countries. Less equipment + extra cost.

It is fishy. No arguments can satisfy this.

[adityamunshi]

Sorry for going a bit off topic. But as aagoswami mentioned, its all about the indian mentality.
We choose our leaders based on other frivolous issues and then complain about the same people. And when it comes to doing something, nobody bothers.
If you have a road accident there'll be a mob waiting to beat you up but there wont be anybody to stand up for the gross misuse of public funds that is slowly draining our country today.

Imagine where we would have been if only half of that money was being put to rightful use.

[jesal]

its just a sad state this thread will go nowhere i know that, i am really just removing my frustrations out here feels good there people like me out there. its even more sad we only choose our politians as well which is one reason i have never voted in my entire life and never will. just today i got in a brawl with a cop he had ***** to open my door and shouting and my freaking GF was right next to me, i swear if he came more close i would have slapped him and beat the **** out of him. though i took his case in the end royally so its ok, but no ways he should try and get into my property

[jesal]

i dont know how many will agree but i feel india tripped on its own feet getting independence. had british still ruled i think it would not have been so bad since we could have got independence sometime or another. but this just sucks