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Old 30th October 2013, 19:13   #16
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Default Re: Why can't manufacturers build "perfect" cars?

“There is something perfect to be found in the imperfect: the law keeps balance through the juxtaposition of beauty, which gains perfection through nurtured imperfection.”
― Dejan Stojanovic

Imperfections help us to keep going in search of the perfections.
-- VineetSoni
If the companies sells you the perfect car how will you be interested in buying the next version. Plus the needs and likings keeps changing person to person time to time so companies brings out the cars which suits your needs according to time.
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Old 30th October 2013, 20:24   #17
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Default Re: Why can't manufacturers build "perfect" cars?

Quote:
Originally Posted by djay99 View Post
Once i had checked manufacuting cost of an Innova G variant some years back and it came to 3.5L (cost based on BOM). Ofcourse huge taxes are added + company margin+ dealer margins + royalty will bring ex-showroom to over 10L. Then add state specific VAT + Road tax which will take it to over 13L.
No way a Innova's material cost can be so less. Normally a automobiles material cost is as high as 80-85% of company's selling price ( Might be not so high for a SUV as companies have huge profit margins on them).

But your figures suggest it to be around 27% which is far low.
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Old 30th October 2013, 20:52   #18
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Default Re: Why can't manufacturers build "perfect" cars?

The moot question to answer would be, what is a Perfect Car?

Many of us here in Team-Bhp criticise Hyundai to be making cars that have lifelessly light steerings and overtly soft suspension.

One day I was discussing with my cousin on cars and he remarked, 'i20 has a great steering, its so wonderful to use. Ultra light and effortless, cars should have a steering like that.'

I know many would share the same thoughts on the i20 steering and on how effortless it is to use. Ditto about the suspension, it is plush and absorbs all the bumps at normal speeds. Yes, as speeds increase the car becomes bouncy and the steering a lot unprecise. But is the target customer bothered? No.

i20 is targetted at the customer who wants an easy to drive car. And it fills the requirement to the 'T'. Luxurious cabin, spacious, plush ride and an effortless steering.

Swift lovers will swear by its handling and the fun to drive element. But a section will blame it for the harsher ride and quality of plastics.

The question then comes why cant we have both? A Fun to drive car that is comfortable too. Many times it becomes difficult to achieve that balance. It requires a high amount of R&D to achive that correct balance between fun to drive and ease to drive.

How many cars do we have that have achieved the balance of ride and handling? A very few. Those cars will therefore have to forgo the good quality interiors etc. to keep the costs low since their focus was for a different set of qualities. Many a times these qualities are contradicting and hence not seen on one car. You may have a car like that, but then be ready to pay for it through your nose.

Also a lot depends on how much the parent company allows the Indian entity, freedom to act on its own. I work for a Scandinavian company that is a market leader in most of the products it manufactures, yet to implement an idea, we in India need to go a long way to convince the group. There may be a fully active Indian entity but the people calling the shots may be sitting elsewhere in the world with little connect to the market here.

All this impacts IMHO.
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Old 30th October 2013, 20:57   #19
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Default Re: Why can't manufacturers build "perfect" cars?

Quote:
Originally Posted by amit_purohit20 View Post
No way a Innova's material cost can be so less. Normally a automobiles material cost is as high as 80-85% of company's selling price ( Might be not so high for a SUV as companies have huge profit margins on them).

But your figures suggest it to be around 27% which is far low.
You can check the raw material costs of listed companies and divide it by sales (ex-factory price of the automobiles)

Maruti -> 67%
Tata Motors (Includes Commercial Division)+ JLR -> 63%
M&M (Includes Commercial Division) -> 50%

Last edited by smartcat : 30th October 2013 at 21:02.
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Old 30th October 2013, 21:11   #20
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Default Re: Why can't manufacturers build "perfect" cars?

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Originally Posted by madhav14 View Post
Can't any of them produce a better automobile with their heart and soul in it paying a detailed attention to every small thing with an aim to give us the best that they could?

Don't we deserve better for the price we are paying? Dear BHPians, your views please.
Quote:
Originally Posted by madhav14 View Post

In US, an average PG professional is getting around 40k-50k dollars p.a. at the minimum. And if we take an example of Honda Accord, it is costing around $32k which means the price of the car is around 70% of his annual salary.

Whereas here in India, the same Honda Accord costs around 30 lacs and the average salary of a PG professional is around 5-6 lacs which means around 5 times of his annual salary.

Huge difference in the purchasing power. Guess our government regulations are playing a major role here.
No. Let us consider Petrol prices to illuminate the problem of purchasing power parity.

In the US (example east coast) - today we have 87 octane gasoline prices averaging at USD 3.99 to the gallon. Source accessed on Oct 30, 2013
In India (example New Delhi) - today we have gasoline prices of the same grade at Rs 72.4 to the litre. Source accessed on Oct 30, 2013
1 Gallon = 3.78541 Litres and 1 USD = INR 61.1458 (currency exchange Source accessed on Oct 30, 2013)
So while in the US you can buy 1 litre for the (equivalent of) INR 64.45, in India you can buy the same litre for INR 72.4.
Yes I know Delhi prices are among the cheapest in India, but so are those of New York in the US. But approximately 12% markup over what you would expect to pay in the US is not a really "Huge" difference.


The point is - the markets tend to take advantage of arbitrage, in whatever shape or form, and hence over a period of time - we can expect prices to hover around a median , with the variance solely dependent on currency volatility (and that depends on macroeconomic factors)


Quote:
Originally Posted by rahulsharma2008 View Post
I get your overall point and donot hold you wrong for your thoughts, its just that we at Team-BHP, think about cars more from our hearts than our minds.
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Originally Posted by Jeroen View Post
It's a bit of an accademic question I think. Untill you define the requirements "perfect" I dont think you can even begin to define the "perfect car". You might find a few like minded individuals ont his forum, but its big world out there, with individual taste, like and dislikes.
Quote:
Originally Posted by smartcat View Post
God has not created a perfect man (except ME, perhaps) or woman yet. Then how can the man's creation (car, home, phone, any other consumer goods) be perfect?
Quote:
Originally Posted by sgiitk View Post
Perfect car is again defined differently by different users. So there is no 'perfect' car for all people.
Agree. It's all down to individual preferences. One man's meat is another man's poison.

Last edited by joybhowmik : 30th October 2013 at 21:14. Reason: Updated source for currency exchange
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Old 30th October 2013, 22:07   #21
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Default Re: Why can't manufacturers build "perfect" cars?

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Originally Posted by smartcat View Post
You can check the raw material costs of listed companies and divide it by sales (ex-factory price of the automobiles)

Maruti -> 67%
Tata Motors (Includes Commercial Division)+ JLR -> 63%
M&M (Includes Commercial Division) -> 50%
How do you calculate the R&D cost and the tooling cost, and the capital cost?

You can't just calculate margin for a product by looking at the raw cost material. What about finance cost, capital cost? Very few car manufacturers these days have the means to finance their operations out of own pocket, most have various degrees and format of financial arrangements and loans in place.

If you want to know how much margin a company is making you look at their published P&L. They've already done this work for you.

Jeroen

Last edited by Jeroen : 30th October 2013 at 22:09.
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Old 30th October 2013, 22:12   #22
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Default Re: Why can't manufacturers build "perfect" cars?

Quote:
Originally Posted by smartcat View Post
You can check the raw material costs of listed companies and divide it by sales (ex-factory price of the automobiles)

Maruti -> 67%
Tata Motors (Includes Commercial Division)+ JLR -> 63%
M&M (Includes Commercial Division) -> 50%
Your method of calculation is very vague.What about overheads, inhouse manufacturing costs etc which add directly to the material cost.
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Old 30th October 2013, 22:19   #23
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Default Re: Why can't manufacturers build "perfect" cars?

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Originally Posted by vibbs View Post
Also a lot depends on how much the parent company allows the Indian entity, freedom to act on its own. I work for a Scandinavian company that is a market leader in most of the products it manufactures, yet to implement an idea, we in India need to go a long way to convince the group. There may be a fully active Indian entity but the people calling the shots may be sitting elsewhere in the world with little connect to the market here.
Interesting statement. I have been working for a Scandinavian company for more than 20 years. If I don't get what I need from our HQ, I blame myself, because apparently I wasn't very good in convincing my colleagues.

Looking at my industry the Indian market and requirements are different from other markets. Since I represent India within our company, its down to me to convince others. I don't know of any company that wouldn't take decisions based on good insights and sound Business Cases. There might still be cases where companies wouldn't want to pursue a particular local initiative.

Especially global companies always need to maintain a good balance in quality and price globally. India being extremely competitive might force you to lower prices to the levels that you will get yourself into problems with customers in other markets.

Jeroen
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Old 30th October 2013, 22:42   #24
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Default Re: Why can't manufacturers build "perfect" cars?

Quote:
Originally Posted by Jeroen View Post
There might still be cases where companies wouldn't want to pursue a particular local initiative.

Especially global companies always need to maintain a good balance in quality and price globally. India being extremely competitive might force you to lower prices to the levels that you will get yourself into problems with customers in other markets.

Jeroen
Exactly what I meant. Sorry if I sounded a little different in my earlier post, but this is exactly what I had intended. Intention was not to put down scandinavian companies, infact I believe it is great experience to be associated with one as compared to multinationals HQed elsewhere and that includes Indian companies.

What I meant was that a strong business case for the market here may be rejected due to a multitude reasons. One of them may be that it does'nt gell well with the company's global aims. Just having a presence here in the Indian market may not always mean that Companies have the freedom to respond exactly as the market here demands. There will be compromises and more often than not locally specific issues may get sacrificed at the Altar of global interests, which may be fair enough for the group, but the customer may at times feel short changed.
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Old 30th October 2013, 23:27   #25
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Default Re: Why can't manufacturers build "perfect" cars?

What is a perfect car?.

The Figo's properly weighted Hydraulic Steering was 'perfect' for me, but turns out, it was not 'perfect' for the masses.

I think, the question should be, 'Why do manufactures compromise'
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Old 31st October 2013, 09:49   #26
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Default Re: Why can't manufacturers build "perfect" cars?

Well, we do have a 'perfect' hatch in the Polo GT TDI now don't we?

Looks, Features, Ride, Handling, Interior Quality, Great Engine, Manual Transmission, FE...

Ahh, but for the price
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Old 31st October 2013, 10:08   #27
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Default Re: Why can't manufacturers build "perfect" cars?

Why do we need a perfect car? And what is the apt definition for a perfect car?

Perfection in my opinion is a relative term, and is linked to one’s needs and preferences. I have a friend who says that her Alfa Romeo 159 is the perfect car, whereas another colleague loathe it for its reliability credentials and manual transmission. For him, the Honda Odyssey is the perfect car, which can comfortably take his wife, two kids and their child seats, mother-in-law, maid etc.

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Originally Posted by avisidhu View Post
Well, we do have a 'perfect' hatch in the Polo GT TDI now don't we?

Looks, Features, Ride, Handling, Interior Quality, Great Engine, Manual Transmission, FE...

Ahh, but for the price
There you go
In my books, it’s a near perfect car for a small family. I say near perfect because they skipped on some important features like ESP, split folding rear seat etc. Maybe the GT TSI is better.
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Old 31st October 2013, 11:05   #28
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Default Re: Why can't manufacturers build "perfect" cars?

Because no one is perfect in this world

Just kidding - Perfect for you may not be perfect for me. It depends on lot of things. So, there cant be ONE perfect car in this world.
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Old 31st October 2013, 11:22   #29
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Default Re: Why can't manufacturers build "perfect" cars?

WOW!! Thanks to all for your wonderful inputs and valuable opinions. Many BHPians rightly stated and explained what does "perfect" means to different people and the business strategies of car manufacturers - following the masses.

Quote:
Originally Posted by avisidhu View Post
Well, we do have a 'perfect' hatch in the Polo GT TDI now don't we?

Looks, Features, Ride, Handling, Interior Quality, Great Engine, Manual Transmission, FE...

Ahh, but for the price
Now, that's what I'm talking about. Polo GT TSI scores + points in every aspect. Let it be looks, fit and finish, quality, engine,ride,handling,features.

This is what I initially intended to term as "Perfect". The manufacturer trying to give his best shot in a particular given segment, by not compromising anywhere unlike the ones who doesn't even care if the plastic inside the car is rattling since it's day of production.

Again, as most of you mentioned, I guess it is all down to personal preferences.

But, I doubt if there will be a person who doesn't love Polo GT TSI

Guess BMW M5 is the only car which can satisfy most of our Indian customers then
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Old 31st October 2013, 11:45   #30
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Default Re: Why can't manufacturers build "perfect" cars?

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Originally Posted by rahulsharma2008 View Post
Coming to the technical part, engineering a car's suspension is not just bolting a hard set up to make a car like Verna ride flatter. It is an art, a science which involves a lot of R&D followed by rigorous testing on the road. That is why it is called tuning!
I think this is something which Tata/Mahindra saves a lot on. Their research is simply not at all up to the mark and is highly cost oriented (read it low cost research)
And I have similar opinion about Hyundai as well. Their research is not up to the mark. Their product are a hit because they know in term of business when to do what and How.
I asked i10 owners why did they buy it and I get highly vague answers such as
'visibility is good, u can see the road'
'small car easy to park' (understandable)
'every women buying it, so me too'
'resale, resale and resale'
'I don't know,I think its a good car since many seen on road'
'No problem in the car except some suspension noise and clutch replacement within 2 months, nice car u know'
'I feel the car is the best on road though I have not tried any other car till date except Alto' (This happened yesterday)
'amazing handling, steering is so free '

Almost 70% of them cannot answer why they did not buy any other car. Reason is simple they did not try one or they are ill-educated when it comes to automobiles.

Quote:
Originally Posted by madhav14 View Post
Now, that's what I'm talking about. Polo GT TSI scores + points in every aspect. Let it be looks, fit and finish, quality, engine,ride,handling,features.
Not according to me. A perfect car should be a right balance of machine and pricing. In case of Polo or any other VW car for that matter, the pricing has gone awry.
If a GT TSI then why not a better tuned, highly featured, cheaper to maintain, good service backed up T-Jet for same price with a much better dynamics??
BUT, T-Jet is again not perfect due to point number 2 mentioned by avisidhu quoted below.

Quote:
Originally Posted by avisidhu View Post
The marketing survey didn't even scratch the surface in that case. The reigning questions still are:
1) Which vehicles do my neighbors/relatives have
2) What does my all knowing uncle/chacha/mama recommend
This is indeed true in addition to many other factors. If this was not the case then Fiat was a super-hit in India.

Last edited by Speed Pujari : 31st October 2013 at 11:46.
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