[stanjohn123]

There is a huge demand for Luxury car's in India and it's not going to come down any time soon. People here don't have a problem paying extra just to have a luxury product that someone else can not afford.

Apple is over priced , but that doesn't stop anyone from buying it. It's a perceived luxury brand which everyone aspires to own , so cost be damned. Same case with Luxury car's , no one is going to complain.

This might change only if we have more manufacturers in the luxury segment like Lexus , Acura , Genesis or Infiniti. But going by Toyota's greedy pricing strategy , Lexus may end up being even more expensive than the German Trio so this can be excluded. Hyundai though have a nice chance of introducing Genesis as an affordable luxury brand.

[ACM]

Originally Posted by Foxbat

Although your argument does make sense, as pointed out by many other members, consider this also:

Since the Euro is used in Germany,

In 2000 (Launch of the Euro) 1 EUR = INR 39-42

Now 1 EUR = INR 66-68

This collaborates my point about devaluation of Rs. even further, as the Rs. Depreciation seems to be even greater with the Euro and hence the price rise of the Lux brands seems even more acceptable.

[DevilzzzzOwn]

A question for one and all - Which is the best Indian car in relation to safety being sold today? Something that atleast falls in the same bracket of the Germans in terms of safety and safety alone.
And by Indian, I mean cars manufactured in India. Every single component.

[shankar.balan]

A few questions, naive though they may seem;

I surmise that it seems a logical corollary that with greater mass production, there would be relatively cheaper costs of such production. With greater demand for a product or products, the prices typically ought to reduce or stabilise.

Why then is it, that everything seems so frightfully expensive these days?

Inflation, yes - a hundred rupee note of today buys one approximately the same amount of stuff that a ten rupee note of 22 years ago did. But inflation alone cannot be the root cause of everything. A Park Avenue Shirt of 22 years ago used to cost about 400 Rs. Today the same shirt costs about 2500 Rs...Amazing!

Another query - if the UK Economy is relatively not so great, then how come the blighted Pound value seems to be ever rising relative to the rupee? Hark back to the early 1950's - there actually was a time when 1 Rupee = 1 Pound!

[S_U_N]

Euro has become weak against INR. It is now where it was two years ago. This should have a reduction in price in India market.
Yes. Some duties and taxes have gone up and this wipes out some of the benefits of the slide in currency.
However, for now, it appears to be lack of rationalization (and competition) for the Indian market.

Overall, Europe is not doing well and the companies are trying their best to have more business out of EU.

[heydj]

On a global level and especially in the US some are saying German luxury car manufacturers are making it too easy for the customers to buy these cars and the prices are not high enough.

In the first quarter of 2015 total 1.3 million BMW, Audi, and Mercedes were sold worldwide. This is an increase of 9% YOY.

Article further goes on to state how having cheaper models of these cars such as BMW 320i is leading to almost everyone with a company lease plan getting into this exclusive club. Is this right for the luxury maker?

Last year 7 BMW's were sold for every Cadillac. This sure questions the fact whether German cars can be considered luxury anymore.

Link to Bloomberg article: http://www.bloomberg.com/news/articl...y-luxury-cars-


Looking at the prices of BMW in the US I feel cheated here in India. Why oh why are the import duties so high that we end up paying twice the amount people in the US are paying.

[aasheeshchopra]

Originally Posted by heydj

Looking at the prices of BMW in the US I feel cheated here in India. Why oh why are the import duties so high that we end up paying twice the amount people in the US are paying.

My sentiments exactly. According to mbusa.com, the new C-Class starts at $ 38400. Which amounts to roughly Rs. 24 Lakhs! Here it starts at Rs. 41 Lakhs. We can only start to imagine Mercedes India's margins. Same goes for Audi and BMW.

[Turbanator]

With extreme depreciation of Euro , it's time that these guys should price products more competitively . Comparing with US market may not be entirely fair given the low taxes & duties besides most of the starting models overseas are basic and you need to add many optional packs , whereas locally many features are standard .

[Mission_PGPX]

true that. Infact, today morning i saw the ad in TOI, ahmedabad about 3 series starting 30.XX lacs, limited stocks. That means they are forced to clear the stock after every quarter if people dont buy at ex showroom prices mentioned on website. I test drove 320D 1 month back and was quoted 39 big ones for premium model on road in ahmedabad after 2 lac discount upfront. After a month such ad in media shows the vibrancy of prices. The question here is if you are going to sell 50% of the cars by giving discounts then why to price it higher in first place? I liked the way toyota does it, not a rupee discount on T-fort, if pressed too hard may be mere 10-15K. That tells customer that no matter when they buy the car, they have to pay that much or may be more and never have that feeling of being cheated. Ofcourse T-fort is overpriced too, but unless market has a strong rival to compete, business demands to make money. my 2 cents.

[patil]

Hi Guys,
Does anyone have any idea about the recent developments regarding free trade agreement between European countries and India in view of Mr. Modi's visit to European countries.

[Hackett]

Very interesting thread and well balanced views. Here are my two cents
If we compare the various taxes and government charges (levies/registration etc), consumer of these luxury car owner in India pays, including taxes on servicing, spare, repairs, insurance and what not. On rough estimates, about 25-30% of the cost of ownership will be these. And there are import duties. Even the cost of indigenization is very high. Skilling the workforce, importing machinery, paying for red-tape and bureaucracy all contributes to the price skew. Like someone mentioned every manufacturer wants to dominate the market with its product. With markets like India in these times cartelization doesn’t work.
Indian market is very price sensitive with hardly any brand loyalty, my understanding is that German car makers are still trying to get a fair share of the market and are not making any major revenue in the bargain. It is still in the investment mode for future revenues.
With the kind of numbers they are selling , in the absolute terms of revenue v/s cost of establishment a quick math doesn’t add up to huge profit. Does it? Prime location dealer showroom space, manpower costs etc. All this coupled with economic fluctuations; my guess is that it is still a tight game for them.
In short, I am not able to see enough money for them in India operations as compared to the challenges, including bureaucratic ones.
So in all this, only the Government is laughing all the way to the bank. (Not counting the fear of retrospective tax possibilities on these companies ;-) )

[Jeroen]

I might be wrong, but I get the distinct impression that for some the (perceived?) notion that a manufacturer is making money makes their products less desirable?

Would we feel better if the likes of Mercedes, Audi and BMW were selling those cars at a loss?

I never understand this approach. And yes there are extra taxes and cost of setting up operations in India (or any market for that matter) but at the end of the day, nobody is putting a gun to my head, or anybody's head for that matter, on what I or he/she should be buying.

Its an individual choice to buy these cars or not. Obviously, it's an individual choice what you take into consideration as buying criteria, but why worry about taxes, set up, marketing cost, R&D, profits and loss of the manufacturer?

To put things in a slightly different context, sure you can compare these cars' prices in India to the prices of said cars in the USA. But look up these cars in countries such as my home country, the Netherlands, or some of the Scandinavian countries and all of a sudden the Indian prices start looking a lot better!

My Jaguar XJR cost USD 72.500 in the USA when new, whilst the exact same car with the same specification cost Euro 114.000 new in the Netherlands. That was nearly double, go figure!

So why are we comparing with the USA and feel offended at the Indian price level? Compare with a different country and feel happy? How weird is that?

How can we say cars need to be priced more competitive in India. Competitive to what? Same model in the USA? Same model in Finland? Same model in the Netherlands? The only competition in India, is the competition in India. Nothing else matters, certainly not for the car manufacturers.

Again, it is every bodies perogative to have their own 'buying criteria'. For me that would be comparing products locally not globally. In terms of pricing, specification, performance etc. And sometimes I just don't like certain cars. For instance I'm not particularly keen on current range of Mercedes and BMW. Great performance and engineering, no doubt, but none of the current models appeals to me much. So no matter what the price would be, I'm not likely to get one of those.

Each to its own, live and let live and all of that!

Enjoy those Germany luxury cars. They are pretty good, if you like that sort of cars and enjoy owning one! I prefer my Indian brand, Jaguar. Although even with them I don't like all models, no matter what they are priced at!

Jeroen

[pamiboy]

OK guys. You need to check the prices in other countries as well to have a balanced view.
In Singapore the cheapest C class (without any extras) costs $197888 (90 Lakh rupees)
The cheapest E class costs $267888 (Rs 1.2 crore)
The E63 costs 551889 (Rs 2.5 crore)
Enough said, are you guys happy now?

[Jeroen]

Originally Posted by pamiboy

OK guys. You need to check the prices in other countries as well to have a balanced view.
In Singapore the cheapest C class (without any extras) costs $197888 (90 Lakh rupees)
The cheapest E class costs $267888 (Rs 1.2 crore)
The E63 costs 551889 (Rs 2.5 crore)
Enough said, are you guys happy now?

Thanks, you just proved my point!

Kudos' to you

Jeroen

[mayjay]

Originally Posted by Jeroen

Thanks, you just proved my point!

Kudos' to you

Jeroen

To compare with countries that have a high taxation regime and car prices are high in general would not be completely right. E.g. An Ecosport starts at 20,000 euro in Netherlands. Merc c class C200 ( auto) costs 43,500 euro. Note the ratio (2.18x). In India this ratio is 40.1 / 8 = 5x. Even if you put duties being different for different segments, I don't think you can account for the difference in prices.

Singapore has high prices regardless of whether you buy a corolla or a merc.

What most people are pointing out is what kind of price premium these manufacturers have over the regular mass market offerings.