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Old 20th March 2010, 18:02   #1
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Default Why do cars in India have waiting periods?

I am hunting around for a decent specced hatchback and i am absolutely shocked to see that most of the cars on my list have waiting periods in MONTHS !

To put into perspective: Hero Honda sells more than 3 lakh bikes every month, Bajaj Auto 2 lakh ! They dont have an issue in pushing their vehicles out...

Cell phone companies regularly sell over 3.5 lakh handsets every month !

What is the problem with car companies that they haven't built the capability to push out a few thousand vehicles ?

Isn't it cash left lying on the table, if a potential customers walk away because he wants to buy a car NOW ?

Is it a distribution challenge ?
or Are car companies lacking in operational excellence?

For Maruti why not set up additional factories ?
For VW: A brand new launch and 3 months waiting period ? Couldn't you guys have created some inventory pre-launch ? They don't even have test drive cars in showrooms.

Look at an automated system like Dell's where you can configure your own computer and it is delivered within a week.
Here with 3 standard variants car companies still cannot deliver , forget customizing your car !

I fail to understand this apathy and complete laxity on the part of auto-makers ? And the fact that customers are ready to wait for 6 month till there swift dzire is delivered !
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Old 20th March 2010, 23:53   #2
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I guess (do not know for sure) that this has to do with just in time manufacturing practice, and to some extent supply of engines/ABS/airbag modules from 3rd parties.
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Old 21st March 2010, 00:21   #3
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Because the companies think you need to wait for all good things in life!
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Old 21st March 2010, 00:23   #4
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So you can buy accessories you are going to buy in future and stock them. As soon as you get car you don't have to spend all the money in one go. Perfect suited example for Swift D.
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Old 21st March 2010, 00:41   #5
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So that they dont have to give you any discounts or freebies. ( "Saar 4 hafte ki waitibg hai. Discount kaise dein??")
And probably the dealers add to the delay as the expect to make some quick money by selling the cars they have to the people who can pay a premium.
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Old 21st March 2010, 01:04   #6
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Its the lazy management i reckon . They are too lazy to start planning in advance . The like to do it in the good old way. Give the advertisement . Lets see who comes . Then will decide what to do . For the time being stay slacking . They dont want to take any chance to have a pre inventory setup and then if anything screws up or the car doesnt find buyers then it gets on their job .
Other reason i see is the lot of stuff is being imported and that whole process is really slow because government is involved in this process .
The 3rd reason which i see is hard to believe that indians are very good good in trying new stuff . Be it any company , any car , If it looks good it surely get heaps and heaps of bookings while the company itself underestimates its cars and set up the assembly line for 5000 unit per year and they get worried when they get to see 5000 bookings withing 10 days of launch .
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Old 21st March 2010, 03:33   #7
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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.
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Old 21st March 2010, 04:01   #8
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Waiting periods for various cars across Pune:

1. Indica Vista : Available immediately. Any variant any color within 3 days
2. Grande Punto: Available immediately most colors. Emotion pack 15 days.
3. VW Polo : 3 Months & Thanks for all the fish.
4. Indigo Manza: Available within 3 weeks of booking.

One more AYE for the Punto :P

(OT

Pandit Auto salepeople are such crooks. I asked the Fiat salesperson for CSD discount he said max benefit 30k. I asked the Tata salesperson for CSD discount on Vista, he says dont have the new price list but max benefit 10k. I call up CSD and get the price list, its almost 55k discount of the OTR price )
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Old 21st March 2010, 05:23   #9
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With some manufacturers, it genuine delay with demand outstripping supply. However, some manufacturers take us for granted and don't add additional capacity to meet demands. This is not only with Cars but with two wheelers too. Anybody tried buying Honda Activa in Pune in last 1 year. How can Honda not increase capacity to meet demand?
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Old 21st March 2010, 08:05   #10
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There are several reasons why the manufacturers cannot build up enough capacity to avoid waiting list... including but not limited to the following:

>> A car is made of much larger number of spare parts that have a much larger diversion between them and hence supplied from a long list of suppliers when compared to a computer or a cell phone or even a two wheeler.

>> It is not as easy to ramp up a car production line compared to the others. It is a very expensive & time taking process and the last thing they would want to realize after spending time & money in expanding the plant is that the demand is now lower or that one of their suppliers cannot cope up with the demand!

>> Even the suppliers have their limitations.

>> We always want fresh stock and are so much concerned about our re-sale value even before we think fo buying our car. Now, who would want to make enough of them and stock them only to realize that we the customers don't want a car even 2 or 3 months old?
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Old 21st March 2010, 09:13   #11
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@Silverfire - Cellphones, motorcycles & car belong to 3 different category; manufacturing a motorcycle is much different compared to car; the number of components in a car are more than a motorcycle; Maruti after so many years have managed to produce one car in 16 seconds & compare this with Maruti in India in 90's which would be more than 16 or GM in US that would be less than 16 seconds; so its just that car manufacturing industry is catch up & in course of time, the wait time will come down.
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Old 21st March 2010, 10:55   #12
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While specific reasons may vary for different companies, the main problem area lies in lower than necessary production capacity of the cars. Name a company and i will tell u what the specific reasons are.
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Old 21st March 2010, 11:07   #13
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Quote:
Originally Posted by MotoKris View Post
There are several reasons why the manufacturers cannot build up enough capacity to avoid waiting list... including but not limited to the following:

>> A car is made of much larger number of spare parts that have a much larger diversion between them and hence supplied from a long list of suppliers when compared to a computer or a cell phone or even a two wheeler.

>> It is not as easy to ramp up a car production line compared to the others. It is a very expensive & time taking process and the last thing they would want to realize after spending time & money in expanding the plant is that the demand is now lower or that one of their suppliers cannot cope up with the demand!

>> Even the suppliers have their limitations.

>> We always want fresh stock and are so much concerned about our re-sale value even before we think fo buying our car. Now, who would want to make enough of them and stock them only to realize that we the customers don't want a car even 2 or 3 months old?
Yes car has more number of distributors, so what you penalize the supplier if the delivery is after scheduled date. This is all about planning.

And as somebody already pointed out why there is almost no waiting period? Everybody takes indians as granted.

Last edited by akas_chauhan : 21st March 2010 at 11:08.
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Old 21st March 2010, 12:09   #14
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"The chain is only as strong as its weakest link" Car manufacturing involves large amount of varied components which are being sourced from various suppliers. Each supplier forms a link in the chain, greater the number of links, higher is the probability of weakness. So I guess this explains the significant delays.

Now if car uses components which are being imported, this further adds to delays. In my line of work I have to deal with import of goods and believe me it is a painfully lengthy process. Consider this, a regular by-air consigment of goods typically takes 7 working days to arrive in India, minimum 4-5 days for clearence in customs. Transportation from cargo terminal to warehouse 2 days. The timings which I have given are the bare minimum and considering that everything goes well perfectly. So you can see that even under ideal conditions it takes minimum 15 working days but typically it is 20-25 days. This itself translates to one month delay.

In case of local supplies, you have to consider the transportation delays, electricity failures, machine failures, strikes, festivals, payment issues, and much more. So given the complexity of factors involved, delays may get reduced in future but hard to say that they would be eliminated completely
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Old 21st March 2010, 13:05   #15
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May be still a lot of people have the herd mentality and believe that the largest selling car/the car with the waiting period is the one to go for and car makers take good advantage of this

But seriously, I feel that we don't have enough volumes to encourage car makers to make investments on capacity addition or offer multiple engine options for eg.
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