Protectionism, Indian Car Pricing, Development Economics etc

[jesal]

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

one thing i do not understand what does india think about itself charging 100% and more tax. its not a super country with sexed up roads and still stupid taxes. the way i see it, best to avoid taxes as much as possible in this country. i hate paying tax at all. crappy roads and high taxes for kicks. if u tax cars right they will all come at a decent prices and all this stops. DUH.

india must be the only country where so many cars and companies are unheard of and the way its going it surely seems like it. 1 crore for a gtr 5 crore for a phantom and all thing abroad costs decent and the best bit service back up to.

[1100D]

Originally Posted by jesal

one thing i do not understand what does india think about itself charging 100% and more tax. its not a super country with sexed up roads and still stupid taxes. the way i see it, best to avoid taxes as much as possible in this country. i hate paying tax at all. crappy roads and high taxes for kicks. if u tax cars right they will all come at a decent prices and all this stops. DUH.

india must be the only country where so many cars and companies are unheard of and the way its going it surely seems like it. 1 crore for a gtr 5 crore for a phantom and all thing abroad costs decent and the best bit service back up to.

You are so right. Unfortunately they are partly eliminating the effects, not the root cause.

Even on the domestic scene, why should I get a Fiesta paying Accord money?

[SLK]

Originally Posted by 1100D

Even on the domestic scene, why should I get a Fiesta paying Accord money?

Thats b'coz some statistic said 7 out of 1000 in India own a car! And as the rule goes in this country... equality!

So if you enjoy a luxuary that others in the country can't enjoy, you'll be fined for it...

And yes I know these import duties are for protecting the economy... but there is to be an equilibrium!... not plain extortion in the name of protection.

but.. we'll get there.... just need to buy-out these car manufacturers cheers:

[khanak]

Originally Posted by SLK

And yes I know these import duties are for protecting the economy... but there is to be an equilibrium!... not plain extortion in the name of protection.

If our economy was open to imports and free competition, do you really think we would have Tata, Mahindra or Reva? Nope, they would all be killed by competition from manufacturers that were making cars for years before these companies. To be honest, I am happy with the 100% duty. Those who really want tthe car can afford it and can get a car in legally. Those who can't have to consume local products. Makes sense to me.

[1100D]

Originally Posted by khanak

If our economy was open to imports and free competition, do you really think we would have Tata, Mahindra or Reva? Nope, they would all be killed by competition from manufacturers that were making cars for years before these companies. To be honest, I am happy with the 100% duty. Those who really want tthe car can afford it and can get a car in legally.

And also by exploring the legal loopholes and keeping the policy makers happy.

Tata, Mahindra, Maini ow many more years of protection would they need? By the way what is the fallout of this protection, door handles that give away on trying to go for a first test drive. Huh!

[khanak]

Originally Posted by 1100D

And also by exploring the legal loopholes and keeping the policy makers happy.

Tata, Mahindra, Maini ow many more years of protection would they need? By the way what is the fallout of this protection, door handles that give away on trying to go for a first test drive. Huh!

The market isnt protected anymore, anyone can enter the Indian market now even without an Indian partner. Tata and Mahindra now have to face competition from all over the world and their ability to do so IMO is only because they were allowed to grow and develop themselves while the economy was closed to competition.

Thank god the government hasn't completely banned imported cars or put some silly quota on the number of imported cars that can be imported into the country. This way anyone who wants an imported car can get one by just paying the duty.

[spawnofsatan]

Originally Posted by khanak

The market isnt protected anymore, anyone can enter the Indian market now even without an Indian partner. Tata and Mahindra now have to face competition from all over the world and their ability to do so IMO is only because they were allowed to grow and develop themselves while the economy was closed to competition.

Thank god the government hasn't completely banned imported cars or put some silly quota on the number of imported cars that can be imported into the country. This way anyone who wants an imported car can get one by just paying the duty.

Yeah, but then you are paying a ridiculous amount of duty that is NEVER going to be used for what it was intended to, the duty that YOU pay will buy a politician's son a new BMW or an undergraduate degree in the States.

Tata and Mahindra could have definitely done better than what they are right now. Maybe if other international players would sell cars here at a reasonable price, that would push Tata and Mahindra to build better cars. The problem is that we are now used to paying more for substandard cars and older generation cars that other countries are done with. It is now time to reduce the duty to something fair, so everyone gets value for their money.

[Jayabusa]

Originally Posted by 1100D

Free up the import scenario, reduce the taxes, all these (mal)practices will stop, as a by product, more revenue will be generated by higher number of cars coming (even paying lower duties).

But don't the policy makers already not know this common sense logic? The answer is that more often than not, they do. Having it this way, leaves a lot of room for these underhand procedures, thus directly benefitting many people.

In this case, it just seems that this particular dealer must have fallen out of favour from someone up there.

Friends, these exorbitant duties are charged with the motive of import substitution. When such high import duties are charged on imported vehicles, many people generally refrain from importing as they feel paying almost double the amount or more is senseless and they settle down for domestic options or cars manufactured by domestic manufacturers. This helps the economy to bloom and this step has definitely helped India.
Imagine, if these duties weren't charged, would we have gone for cars manufactured by TATA, Maruti etc.

[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?

[khanak]

Originally Posted by spawnofsatan

Tata and Mahindra could have definitely done better than what they are right now. .

Tata just bought Jaguar and Landrover, built the cheapest car in the world, have a respectable market share in India and now are trying to pick up a stake in one of the best design houses of the world. Id say they're doing pretty well.

[flyingspur]

Originally Posted by khanak

Id say they're doing pretty well....

...because they're protected. Anyway I've always believed that if a Santro D ever came out, Tata would never have recovered from their Indica V1 days. (We had a V1 from the first batch, and presently a V2 so this statement is out of experience). And further, I doubt if it's appropriate for the owners of JLR to make their own cars with build quality that rivals play dough.

[khanak]

Originally Posted by flyingspur

...because they're protected. I doubt if it's alright for the owner of JLR should make Indicas with build quality that rivals candle wax.

Are they still protected? AFAIK the economy opened up a few years ago and since then Tata has had to face competition from any auto maker that wants to sell cars in India. People still chose Indicas over Altos and Safaris over Innovas. Would we have ever chosen an Estate over an Accord?

[flyingspur]

Originally Posted by 1100D

Tata, Mahindra, Maini ow many more years of protection would they need? By the way what is the fallout of this protection, door handles that give away on trying to go for a first test drive. Huh!

Now there's a statement that perfectly underlines my point. Thanks 1100D.

[khanak]

Originally Posted by flyingspur

Now there's a statement that perfectly underlines my point. Thanks 1100D.

Like I mentioned in my reply to that post, the economy isnt regulated anymore and any company can sell cars in India if it wants. Setting up production in India will ensure that the cars cost half as much.

[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?

Originally Posted by khanak

Setting up production in India will ensure that the cars cost half as much.

Not really (example? Accord). And the red tape involved with setting up production here, I'm surprised some of the fellows who came here to sell their wares ever did !! Point is, imports should be freed up (meaning bring the %duty down so something within the limits of sanity! I remember saying I agree with your points, but not completely. It can't totally be done away with, I agree). The Germans aren't made everywhere they're sold AFAIK, and definitely not the Italians.