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Old 18th November 2005, 19:36   #31
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Quote:
Originally Posted by Aroongupta
Guys, I am planning to buy an Optra. Do you think it would be a wise idea to wait till january. One thing is teh price reduction you mentioned...and secondly its anyhow not a godd idea to buy a car in December. It will affect resale.

Arun
You can wait till Jan n Dec but you could look at a good deal if you buy the car in December but do not register it/ put it on the road until Jan
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Old 19th November 2005, 11:38   #32
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for all those guys with access to cars abroad, can any one give some figures on (a) type of car they use, and price purchased (b) insurance costs (c) avg. service bills?
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Old 17th January 2006, 03:24   #33
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Ajmat,

One thing that this analysis does not bring out is the purchasing power parity. 1 GBP = INR 80 in terms of actual conversion, but in terms of purchaing power, its more like 15 ~ 20.

So a 10% variance in actual converted rates still mean there is a 75% difference in terms of purchasing power.

What is purchasing power?
Your salary in India is INR 50,000 and your salary in the UK probably would be GBP 2500. I.e. 1/20th.
A loaf of bread or a bar of soap in the UK costs about 80p ~ INR 60, but the same thing in India costs only about INR 15. I.e. the UK cost is about 1/20th, not 1/80th.
Infact most things in the UK are about 1/20th - 1/15 of its indian cost - cosmetics, food, eating out including fast food, hotels, CDs.

The FMCG folks seems to have got their India costing right factoring in the Purchasing power.
What I dont understand is why the car manufacturers are not able to do India pricing considering:
1. when manufacturers in other industries are able to
2. most of our cars are being manufactured in India

Imagine a swift which cost GBP 8000 in the UK, if it could be sold in India at INR 1.2 - 1.6L. Now THATS interesting!!!

Maybe it has something to do with the way the industry regulations are structured in India. Most capital goods (including electronics) work on a factor of 80. But everyday goods get converted on a factor of 20.

Hmmmm does that mean india sales add a disproportionately high component to the turnover of the car manufacturers global annual reports.... Confusing....
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Old 17th January 2006, 04:06   #34
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Quote:
for all those guys with access to cars abroad, can any one give some figures on (a) type of car they use, and price purchased
Filcord, to give you an idea:

VolksWagen Jetta 2.5L 5 cylinder 150HP* $24975

Options
6 Speed Automatic Transmission with sport
mode includes Tiptronic $1400

Luxury Package (includes)
Power tilt & slide sunroof
16" Alloy Wheels
Chrome trim round windows $2075

ESP $450
------------
$28,900
Freight $615
PDI $495
Gas Tax $75
Air Tax (Airconditioning Tax) $100
Admin Fee $199
-------------
$30,384
15% GST, PST $4558
------------
$34,942
======
1 CAD=Rs.38 Approx Rs. 13,27,796

*Standard Equipment includes
Air conditioning
Day time Running Lights
Power Windows with Driver/passenger auto Up/Down
Power Heated mirrors with integrated side blinkers
Heated Seats
8 Way Adjustable seats with power seat back
4 Air Bags
Front and Rear Disc Brakes with ABS
ASR (Mine has ESP which is a option)
Heated windshield washer Nozzles
Speed Sensitive Wipers
Air conditioned Glove box and center arm rest
Cruise Control
10 speaker AM/FM stereo with in dash single CD

Even though some cars maybe more expensive then their Indian equivalent they still have lots of standard equipment so it kind of evens out. In this case, the car costs $29515 (car cost+freight) which is approx Rs. 11,21,570. Rest goes to the government as taxes. The question is where would you slot the Jetta and which cars in India would you consider as it's equivalent? Skoda Octavia, Toyota Corolla maybe...
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Old 17th January 2006, 06:52   #35
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with the process of liberalization is practice it will take some time for cars to be available at the prices we expect. Most probably 2008 will be the year when we have the government duties and taxes lowered a bit.

but then we certainly are not paying the insurance the N.americans are paying.
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Old 17th January 2006, 10:57   #36
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Quote:

One thing that this analysis does not bring out is the purchasing power parity. 1 GBP = INR 80 in terms of actual conversion, but in terms of purchaing power, its more like 15 ~ 20.
Splendid point.

Though Purchasing power will have a huge influence on pricing decisions, it is not a compulsive factor like say taxes. The Mac burger was used extensively by marketeers to gauge purchasing power, as strategists thought highly of Macs pricing strategies.

Quote:
The FMCG folks seems to have got their India costing right factoring in the Purchasing power.
What I dont understand is why the car manufacturers are not able to do India pricing considering:
True. But the FMCG also have a significantly bigger target market and a lower cost segment than say...a Suzuki Swift.

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Old 17th January 2006, 12:15   #37
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shouldn't we take into account the PPP (purchasing power parity) to get the actual picture. if we take into account the average income and the purchasing power and compare it with the prices, then its definitely cars are cheaper in UK than compared to india.

Last edited by tifosikrishna : 17th January 2006 at 12:20.
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Old 17th January 2006, 17:20   #38
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Quote:
Originally Posted by amit
Filcord, to give you an idea:

VolksWagen Jetta 2.5L 5 cylinder 150HP*
.... Approx Rs. 13,27,796
The question is where would you slot the Jetta and which cars in India would you consider as it's equivalent? Skoda Octavia, Toyota Corolla maybe...
Wow, the specs are mind-blowing. There is certainly no car at that price with the same features.
I think it would be fair to compare it to a Super-loaded Skoda Octavia, probably share the same platform... but the specs?!!!
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Old 17th January 2006, 18:05   #39
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even the basic car in india - Hyundai SANTRO comes with airbags and ABS in the Western countries! yes, there is definately a lot of Ripoff going on, and well that is how u look at it, and how manufacturers look at it. initially they price it higher to cover costs, especially cars in the above 15lk range. coz the volumes are not much, but service is to be provided even then. later on, as they get volumes, they do cut prices down..
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Old 17th January 2006, 18:28   #40
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Are we being Ripped Off??
Maybe, Maybe not...
The discussion would go on and on about the Purchasing power or the per capita income, but is the car a real VFM???

Firstly is the service meted out of the same quality????
I definitely do not think so??
Agreed, that a big chunk of that money goes to taxes and to the governments kitty...but is it helping us in any way???
Again the answer is NO!!!
Bangalore is the highest state for Road Tax...whereas Delhi is the cheapest followed by Mumbai. Correct me if I am wrong.
So what do we pay this road tax for?? For better infrastructure.
Do we get it..surely not in Bangalore where you pay road taxes to spoil the suspension of your car.

Also, the economies are higher in the US. Cars are cheaper.
Service is better. No Service is Excellent. So why do we have to take it lying down?
car manufacturers in India are really trying to cut down on features that really add value.
simple features that really make all the difference.
For example the existence of a heater ....
How many cars do not have that feature even if it simply means displacing the engines hot air inside the cabin.

Bigger tires - I do not understand the concept...Why can't car manufacturers give good set of tires? Cost? I do not think so...when the cars are coming out of a production assembly, the cost per car goes down..Is it because we Indians always think of economy, FE etc??
I think the tide is shifting, the above middle class community is really thinking of a whole lot of stuff apart from FE, like safety, comfort, aesthetics etc..


Brakes….Hyundai sells its Accent, a premium car which costs a cool 7 lakhs, but it does not have Ventilated disc brakes…Why?


I will agree on the point that the cars are overpriced in India. Main factors that affect it are taxes and all that jazz.
Also, I will not mind paying extra if the car is the same version as in the US or elsewhere. So why is the disparity where we get sub standard cars for a higher price than it is sold abroad and the cars are manufactured right here in a city of India where costs are low ?????????????????????

End of the day I feel that we are not being ripped off, but we are being taken for a loooooong ride.....

Last edited by adit1329 : 17th January 2006 at 18:29.
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Old 17th January 2006, 19:21   #41
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scale, scale. large ticket products, with humongous marketing costs, and 3 year product cycles at best, need huge scale to keep costs low. And the taxes do not help.
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Old 17th January 2006, 19:38   #42
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Quote:
Originally Posted by GTO
But the FMCG also have a significantly bigger target market and a lower cost segment than say...a Suzuki Swift.
GTO
Thats always the case isnt it? Chicken or the egg first?

10 years ago the mobile rates in India were to the tune of INR 20 per minute. People thought twice before using a mobile. How many people had mobiles?

How much is it now? 50P per minute? Who doesnt have a mobile now? India has one of the cheapest telecom rates in the world and is also one of the fastest growing telecom markets.

But the difference was that the government decided that telecom penetration had to increase, and they did everything in their powers to increase penetration.

Now I dont know the costing and pricing structures in the auto industry. The fact that the government considers the car a luxury is probably the biggest reason for these price differences :-(
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Old 31st January 2006, 08:38   #43
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Sometime ago i read that this year, some of the WTO rulings on duties will kick in and therefore India will have to reduce duties on cars. Does anyone know more about this?
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Old 27th August 2007, 17:44   #44
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I was surfing the net when i came across some car prices and compared it with what we pay in India....and boy! are we being taken for a royal ride! Ex: Hyundai Accent (Verna): $12665 starting for GLS 5 door in the US
Hyundai Verna: 798,000 approx ($19500) for mid level model (Xi) in India

Honda Civic: $15010 starting for DX. LX is $16960. EX is $18710.
Minimum 1150000 ($28000).

And cars sold in India dont have standard features available in the US like side/curtain airbags (Honda), airbags/ABS (Hyundai).

These are just two examples. Other cars which are overpriced include Sonata, Corolla, Accord, C-class, E-class, S-class, 3 Series, 5 Series etc. I havent included cars like Camry, CR-V since they are imported fully built and are subject to heavy taxation.

What's really jarring is that most reviewers/magazines - Autocar in particular call these great value!!
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Old 27th August 2007, 18:03   #45
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This is nothing new. We are certainly paying more for any car in India. Is there any car that is cheaper in India than elsewhere. Please let us know.

A small joke, when I visited my US office, a collegue used to pick and drop me in his BMW X3. His jaws dropped when I told him about the car's price and pofiles of people who use them in India. He felt like a king when I was with him.

Another person who drove me around in a Porsche Boxter, though the car prices in India were unreasonable. He picked his Boxter for about 38000 USD. Imagine what it costs in India????
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