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Old 30th March 2010, 05:45   #31
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Having lived in the US for last 10 years and having brought about 5 cars from various manufacturers such as Toyota, Honda and Lexus I can vouch that there is no reason for having a waiting period for cars or any other vehicles for that matter. If manufacturer wants to have enough supply, they can have it from day 1 of the launch.

I never have waited for a single day to get any of my cars including fully loaded ES350 or Toyota Highlander Limited V6 4x4 with GPS or redesigned Civic in 2006 which was supposedly hard to come by.

I have always walked into the dealership after doing my research and have always driven off in my new car without trouble.

If manufacturers and dealers can keep up with the supply and inventory in world's second largest market (recently China took over US as world's biggest car market) then there is no reason why same companies can not keep up with demand in India.

I agree what what others have already said, we have heard mentality. Everyone thinks that just because there are 20 thousands people waiting for swift, it must be a good car so I'll wait for it as well, no matter there are competitors who have similar or better product for same price range. Also, as a manufacturer I have no incentive to reduce the backlog or increase capacity or better manage the inventory because I have 20 thousand people waiting for me to give them their car.

We have been accustomed to this artificially created quotas and shortages from the days of Bajaj scooters and premier padminis which also had endless waiting period. Back then they did not have any incentive to increase production either because of the protected market and closed economy.

Last but not the least, people have a mentality to automatically assume something that is in short supply is a superior product than something that is available for purchase right away as is the case with Swift Vs. Vista.

So, there we go, its a combination of people's perception, heard mentality and complacent manufacturers who thrive on creating artificial shortages are the reasons why we have waiting period for cars in India whereas much bigger markets like US do not face such issues to the most extent. (As far as I know last car which had waiting in US was Prius during initial launch or exotics such as Audi R8).
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Old 30th March 2010, 13:21   #32
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The fact that Maruti has waiting lists for Dzire and Swift, but cash rebates for every other model is a big danger sign for them. There is a clear problem in their supply chain with over capacity in some cars and under supply in others. I am sure some bloke in Suzuki is worrying about this. Though it is fashionable to come up with conspiracy theories of purposeful under supply, "herd mentalities" etc, it does not make economic sense to starve a market, especially in the scenario of growing competition. Maruti has kind of been luck so far due to less than nimble competitors, and a market growing furiously, which will smooth out such problems.

In more mature markets like the US, these types of inefficiencies in supply have pushed manufacturers to the verge of bankruptcy (GM, Ford, Chrysler and more recently even Toyota over produced trucks and SUVs in an environment of cheap petrol. Come 2008, they had the shocker of 4$ per gallon of gas and people stopped buying Hummers and suburbans; companies had millions of gas guzzling SUVs that no one wanted to buy - it killed the new as well as the resale market).

Maruti Suzuki stock holders should be very worried.
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Old 30th March 2010, 19:16   #33
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I seriously doubt that any manufacturer is so sadistic in making customers wait. Its obvious that most of the manufacturing plants are operating at full capacity. This leave little or no room for expansion. Moreover, the Indian population is swelling year on year and with rising per capita, more people are able to afford to buy cars. So demand is also increasing. Don't forget India's brilliant infrastructure, as this plays a vital role too. Most cars are transported from the factory to the respective dealers in various towns/cities on trailer trucks which take a minimum 1 week to travel north-south or east-west or vice versa. Don't also forget that we have power cuts quite frequently. So manufacturing plants are forced to make necessary arrangements to ensure uninterrupted power supply. This will lower their propensity to invest for larger plant size. So all these factors combined lead to longer than expected wait in taking delivery of the vehicles.
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Old 31st March 2010, 10:33   #34
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Consider the following factors:

1. Manufacturing cars is a much more capital intensive process than manufacturing cellphones.
2. The logistics of storing and transporting cars are more complex than cellphones.
3. It is not easy to expand production capacity. Look at what Tata had to face in Singur. The Nano production and therefore delivery were severely affected by the Singur fiasco.
4. Rules and regulations: When I went to check on a Versa, the Spectra dealership told me they had a Versa ready in their stockyard, but it would still take at least 10 to 12 days for them to complete the registration/octroi formalities before they could hand over the car to me. Then there are financing issues.
5. From a financial standpoint, due to the high cost of manufacturing and storing a car, it's always better to produce against demand instead of anticipating it and risking inventories of slow moving models. If you were to expect ready delivery of any car model, the manufacturers/dealers would increase the price charged, to ensure they are able to stock up on all the models.
6. Today with many models sharing the same platform, companies use the same assembly line to churn out different models. There are also processes (just in time) to ensure the production will work smoothly. The flexibility available in this setup would be quite limited. If a Maruti factory has planned producing x quantities of model z in the next week, they can't easily accomodate just one or two of model p within that week.
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Old 31st March 2010, 12:02   #35
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Quote:
Originally Posted by honeybee View Post
Consider the following factors:

1. Manufacturing cars is a much more capital intensive process than manufacturing cellphones.
2. The logistics of storing and transporting cars are more complex than cellphones.
3. It is not easy to expand production capacity. Look at what Tata had to face in Singur. The Nano production and therefore delivery were severely affected by the Singur fiasco.
4. Rules and regulations: When I went to check on a Versa, the Spectra dealership told me they had a Versa ready in their stockyard, but it would still take at least 10 to 12 days for them to complete the registration/octroi formalities before they could hand over the car to me. Then there are financing issues.
5. From a financial standpoint, due to the high cost of manufacturing and storing a car, it's always better to produce against demand instead of anticipating it and risking inventories of slow moving models. If you were to expect ready delivery of any car model, the manufacturers/dealers would increase the price charged, to ensure they are able to stock up on all the models.
6. Today with many models sharing the same platform, companies use the same assembly line to churn out different models. There are also processes (just in time) to ensure the production will work smoothly. The flexibility available in this setup would be quite limited. If a Maruti factory has planned producing x quantities of model z in the next week, they can't easily accomodate just one or two of model p within that week.
Spot on..
I think this is the most realistic reasoning. Very valid points. More true than any other reasons like manufacturer trying to create a waiting period, etc.
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Old 31st March 2010, 13:33   #36
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Originally Posted by tushky View Post
In USA, you can get any car on a same day. and in US every automaker has 10/20 different models in its line up.
I dont think this is completely true. You might not get what you want immediately. However there might be other dealers who might have what you are looking for.

Also its not virtually possible to have all models - with color/trim s in inventory that one can walk in and get their choice on same day.

I attribute our waiting period to
1. Conservative business attitude.
2. Infrastructure issues (transportation takes huge time)
3. Customer mentatlity ( of willing to wait)
4. Minimal dealer inventory ( compared to West where dealership is huge area & inventory)
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Old 3rd April 2010, 08:27   #37
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Let me cite an example: Two years back when I was hunting for a bigger vehicle, my first preference was a Versa. Upon checking on at least four to five dealers within Mumbai I found none of them had a Versa for display or TD. I finally stumbled across the Spectra showroom at Vikroli/Ghatkopar who said they have a single Versa DX2 model at their warehouse.

The Versa has been gradually taken off the shelf by Maruti after noting its disappointing sales. I was told at the time it was only produced against order and the waiting period could be from 1 to 2 months. What this means is Maruti got rid of their stocks at the dealers' yards and is now sitting pretty without any single Versa on their inventory. Which makes good financial sense. Also when they came out with the Eeco, they didn't have to worry about pushing the old Versas from the stock because they didn't have any. Unlike cases where the dealers have to give huge discounts to get rid of the older models. Overall a sound financial strategy for the company.

As a customer you may feel a bit outraged about this, but because the company has been following such a practice, it's able to use its financial resources wisely and so is able to price their products competitively. Even at the time, from a financial standpoint, an 8-seater triple row AC versa at just over 5.5 L OTR was a killer deal.

(Incidentally, I had booked the Versa from Spectra, without having received a TD, but then cancelled it after a week for a completely different reason).
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Old 3rd April 2010, 08:47   #38
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The finished product lying in the dealer lot costs money to the manufacturer. The "inventory carrying costs" is high for automobiles. If they started to "stock" vehicles, that will increase the price of the vehicle assuming the manufactures want to make "X" (a constant profit) always. So it is at the best interest of both the manufacturer and the customer to have a small waiting period.
Unlike in developed markets, it is not easy to predict the demand and stock accordingly. For example a vehicle which is popular in one part of the country may not be that popular in another part, same with color and variants.
A manufacturer in india may have a limited number of paint booths (1, or 2) which means they could make only 1 or 2 colored vehicles at a given batch and the colors used in booths will be switched periodically. So the more popular colors will get a bigger time slice in paint booth schedule and hence less waiting period.
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Old 3rd April 2010, 09:51   #39
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I sense a lot of desperation from most of the members on here. However, this is a practice not just in India but elsewhere around the world as well. Take Europe for example - I've had to wait for anywhere from 2 to 3 months to get the car of my choice. People get an options sheet, spend weeks or months ticking the relevant options, submit that to the dealer and then wait for a couple of months as their order is processed, manufactured and delivered. Nobody is complaining in Europe.
Take the big ol' US too - due to the mentality in the states, most dealers just stock the top of the line variant or cars in just a couple of colors. Want a stripped down bare bones model? Want one of those great looking shades of orange or blue? Well, you'll have to wait. I know I waited for almost 5 months when the current gen R56 MINI CooperS came out back in the summer of '07. The same goes when people opt for a factory delivery experience (commonly known as European delivery or ED) for their German/British/Swedish cars. Yes, you can get a brand new Bimmer off the showroom floor but why have that when you can get to go to Dingolfing or wherever after a couple of months to pick up your brand new 5er or ///M and drive it over scenic roads & autobahns? Specialty manufacturers like Ferrari have such a long waiting list (almost 2 years at the local dealership in my area) that dealerships advise a Ferrari first timer to go for a used model rather than book a brand new one. Heck, even a mass market brand like Honda is not immune to such things. My Accord coupe was sourced from a dealer halfway across the US when I wanted a particular shade of blue that wasn't available anywhere in the city/state and it took more than a week to get my hands on it. Nobody is complaining in the US either.

Last edited by khan75 : 3rd April 2010 at 09:56.
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Old 3rd April 2010, 13:41   #40
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Originally Posted by khan75 View Post
...
Specialty manufacturers like Ferrari have such a long waiting list (almost 2 years at the local dealership in my area) that dealerships advise a Ferrari first timer to go for a used model rather than book a brand new one.
...
I thought Ferrari only sold by invitation? I am under the impression that you can't go to a showroom and ask to buy a Ferrari. Like the legendary statement from Harry Potter, the wand chooses the wizard and not the other way round, I thought Ferrari choose the people whom they want to sell their cars.

Now second hand Ferraris? Hmmm....
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Old 4th April 2010, 01:09   #41
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Some light thrown on this issue by this article in BSMOTORING



With demand far outstretching their production due to capacity constraints, popular car models like Maruti’s Swift and Swift Dzire, Indigo Manza, Chevrolet Beat and Cruze, Volkswagen Polo and the diesel variants of Hyundai i20 and Verna have waiting periods ranging from a fortnight to nearly four months.

Expectedly, these are also the models on which there are no discounts. While the petrol variant of Swift has a waiting period of a month, there is a two-and-a-half month waiting period for its diesel counterpart and almost four months of waiting for both variants of Dzire.

This is primarily because the company is also manufacturing A-Star in the Manesar plant (the other factory is at Gurgaon) to cater to the export demand. “We are bottlenecking capacity by realigning product mix at both the plants,” Mayank Pareek, executive officer (sales and marketing) had earlier said.

It is learnt that the company has shifted production of the Swift petrol to Gurgaon, thereby freeing 40,000 units per year at Manesar. Its exports (the majority being of A-Star) also rose by 126.7 per cent between April 2009 and this February, at 131,982 units. Maruti Suzuki India had recently said it would ramp up Manesar’s capacity by 250,000 units by 2012, at an investment of Rs 1,700 crore.

Neeraj Garg, member of the board and director, Volkswagen Passenger Cars, Volkswagen Group Sales India, said: “Polo is having a waiting period of about three-four months currently. We are ramping up the production of it at Chakan (near Pune) and will try to bring down the waiting period. We have confirmed bookings of 5,000 units of the Polo, with 500 units already delivered.” The Polo was launched on March 8 and is currently sold through a network of 43 dealers.

According to a Hyundai dealer, the Verna diesel has two to three weeks of waiting, while the i20 has a waiting period of three to four months. “Demand for the i20 is three to four times higher than what we anticipated. As a result, the company had ramped up production and is now working in three shifts across its two plants to roll out 4,500 units of i20 a month,” said Arvind Saxena, senior vice president, Hyundai Motor India.

The Indigo Manza, available in petrol and diesel variants, has a waiting period of nearly 45 days, while the Chevrolet Cruze and Beat have a one-month and two-month waiting period, respectively.

“Beat has been in great demand and we are operating in two shifts to roll out 4,000 to 4,500 units a month. This, along with Spark and other models, will help the company to grow in excess of 100 per cent in March, vis-à-vis 5,001 units sold in 2009,” said Ankush Arora, vice president (sales and marketing), General Motors India.

“There is a wait of six weeks for Manza and the company is trying to ramp up production to the possible extent,” a spokesperson for Tata Motors added.
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Old 4th April 2010, 01:24   #42
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I thought Ferrari only sold by invitation?
Certainly not by invitation as there are millions of Ferrari owners around. How would they ever choose a couple of thousand from such a large group? The invite thingy works for hypercars like the Enzo & FXX that are produced in mere hundreds but models like the F430, 612 and 599 are available for any existing Ferrari owner to add to his collection.

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I am under the impression that you can't go to a showroom and ask to buy a Ferrari. Like the legendary statement from Harry Potter, the wand chooses the wizard and not the other way round, I thought Ferrari choose the people whom they want to sell their cars.

Now second hand Ferraris? Hmmm....
That's precisely the point, right? If you actually have to go to the Ferrari dealership to ask to buy one of their cars, you're probably a first timer with no direct contacts. It might sound funny but that's the way it goes.
Real world example:
The head of the VC firm that I had partnered with had a 430 Spider and bought a California by directly calling up the sales guy at the dealership and had him come over to his house to complete all the formalities. Compare that with the VP at an investment bank I used to work at in the past who went to Manhattan Motorcars (one of the biggest F/Lambo/Maser/RR dealerships in the world) to buy a 360M (the F430 didn't exist back then) only to be advised that he'd be better off buying one from the used car lot. Imagine a sales guy telling a head honcho of a firm who's worth a million dollars that he can't buy a new car.
I'm not saying that a person with tons of cash technically can't buy a new Ferrari the first time around but he'd certainly get a lower preference compared to existing owners of F cars.

Last edited by khan75 : 4th April 2010 at 01:31.
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Old 4th April 2010, 15:39   #43
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Originally Posted by Silverfire View Post
Some light thrown on this issue by this article in BSMOTORING

...
According to a Hyundai dealer, the Verna diesel has two to three weeks of waiting, while the i20 has a waiting period of three to four months. “Demand for the i20 is three to four times higher than what we anticipated. As a result, the company had ramped up production and is now working in three shifts across its two plants to roll out 4,500 units of i20 a month,” said Arvind Saxena, senior vice president, Hyundai Motor India.
Wow- my friend got his i20 in 15 days, who is being made to wait 3-4 months?? If this just hype created around the brand? I think the manufacturers got scared with the situation in the US and scaled down production big time last year. Now they are deluged by the orders post Oct 2009 or so. In India EVERYTHING has a Q!
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Old 5th April 2010, 09:16   #44
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Wow- my friend got his i20 in 15 days, who is being made to wait 3-4 months?? If this just hype created around the brand? I think the manufacturers got scared with the situation in the US and scaled down production big time last year. Now they are deluged by the orders post Oct 2009 or so. In India EVERYTHING has a Q!
It also largely depends on the colour preferences and if the dealer has a car readily available with him when you happened to book it, you wouldn't be waiting a few months. When I booked a Versa with Spectra, they were holding perhaps the only one brand new Versa with them, and I was promised a delivery within 15 days after completing all the formalities. But if that vehicle were sold already, I would have to wait for around two months for a new Versa.

Also when I checked with Fortune for the Tata Sumo Grande, they had two or three colour variants readily available, while for the others you would have to wait for about a month or so.

.
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Old 5th April 2010, 18:01   #45
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Maruti has been seeing sales chart of Swift for 5 yrs now. I dont buy the argument that they still cant predict sales figure to maintain an inventory for quicker deliveries. Maruti have the biggest product portfolio and highest sales figure, if they cant manage it who can?
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