[gupta_chd]

Originally Posted by nikhil_pon

Hello, I have a question --- in the US Toyota Camry XLE model costed $30000 around 2010 - 2011 year. Now also it retails at the same price. I would like to understand if there is no inflation in US or how is it that Toyota is able to keep the prices unchanged over such a long duration. I am sure the equipment list has increased over the last few years for the XLE model

1. You may want to look to average lending rate in US.
2. Like wise, you may check the US-INR conversion rate.
3. Feature list may go up as the equipment price tend to go down with time. Of course it is not true for all equipments but for more than not.

[burnt.]

Originally Posted by nikhil_pon

Hello, I have a question --- in the US Toyota Camry XLE model costed $30000 around 2010 - 2011 year. Now also it retails at the same price. I would like to understand if there is no inflation in US or how is it that Toyota is able to keep the prices unchanged over such a long duration. I am sure the equipment list has increased over the last few years for the XLE model

I was intrigued by your question and looked up the actual numbers. The V6 model of the XLE was around 30K for the 2011 model and is around 34.7K for the 2019 model.

That's perfectly in line with the average inflation of 1.5% in the US during that period. 30K in 2011 is 34K in 2019.

[nikhil_pon]

Originally Posted by burnt.

I was intrigued by your question and looked up the actual numbers. The V6 model of the XLE was around 30K for the 2011 model and is around 34.7K for the 2019 model.

That's perfectly in line with the average inflation of 1.5% in the US during that period. 30K in 2011 is 34K in 2019.

Thank you for the reply Burnt and Gupta. Very interesting points you bring up.
The reason i posted is the camry v6 which i own was bought by the previous owner at 30k as per the invoice. Recently my colleague has bought a 2019 camry v6 for 31.8k. (he had negotiated some discounts). So the prices have not really risen substantially compared to Indian market. Offcourse the points noted by gupta_chd above regarding the lending rates , conversion rates have a role to play.
I am looking at it like Camry is a bread and butter car in US, similarly we can compare the Swift as the thread is created quoting this car as example. The swift prices are substantially higher now. Yes inflation is lot higher in India, raw material cost probably gone up, labor hourly rates gone up.

If we are to look at Camry itself as an example then the hybrid variant was recently launched in India with showroom around 35 Lakhs if I am not wrong. I am not sure how much it used to cost around 2010 / 2011. Probably in the early 20 lakhs.
Bit of googling landed me with below link
https://autos.maxabout.com/cars/toyota/camry-2011
EX-SHOWROOM PRICE
₹ 21,58,000 - ₹ 23,73,000


Even though considering inflation and other factors, is it ok for Toyota to price it so high now? Even they have got some Govt benefit since it is hybrid variant launched. They might argue that the competitor Honda Accord is also priced similarly now.

[peus017]

Found a very interesting read - https://www.mycarhelpline.com/index....=569&Itemid=91

I believe there are 3 sides to the inflated car prices. Producers, regulators and consumers viz. Manufacturers, Government and Buyers

This explains why the car prices are so high from Govt. side.

A necessary commodity is now turning into luxury

[peus017]

Came across this in today's paper
https://timesofindia.indiatimes.com/...-of-the-stick/


58% is a huge number.

[styx71]

Why does the above calculation from TOI include income tax (line items C and H) as well. C and H are to be paid to the government irrespective of one buys a Car (or Fuel) or not, as these are "Income" taxes.

[HONESTabdul]

Having read all the posts I am going to post my 2 cents as I have come to believe.
1. The tax structure is essentially flawed . It is built on the premise that the affluent buy cars & fuel and hence they should be milked further. While this was justifiable 3 to 4 decades earlier now with the upwardly mobile middle class buying cars out of necessity and not luxury, this has become a sort of extortion.
2. The car market establishes itself on first time customers and thrives on returning customers. Second time customers will necessarily want to upgrade thus providing mobility to the industry. With such prohibitive taxes, customers will want to revive their old rides rather than spend more on a new one.
3. This in turn will make car companies reduce the time period a particular model is kept on the market and seek to attract more first time customers with revamped models.
4. They will spend less & less on safety features to keep their models cost effective. The service center will have lesser new cars to service and will concentrate on milking old customers.
5. Few car companies can afford to keep going in such a market and leave the customers to be fleeced by a monopoly of 2 to 4 manufacturers.

[stallmaster]

The public transport employment, commercial vehicle sales lobby also influences policies regarding taxing private vehicles and/or vehicle fitness certification/cancellation to a huge extent. It's quite a circle.

The worst thing about constant inflation of car prices vis-a-vis wage increment, especially when you take into account fuel prices, living costs, etc is that the net demand of potential aspirational first time owners is likely to shift quite a lot to the second hand market. Combined with the trend of people most likely holding on to their vehicles for longer, there's going to be inflationary tendencies in the used car market as well.

[RaviK]

While inflation is surely an element, contributing to price increases, there are other factors too. Consider this -

1. I recall someone buying an 800 around 1992 for 225k or so (Rajasthan). Today the alto 800 retails at 299k in same town

2. Dad bought the hero Honda cd100 for ~33k in 1993. Even today, the entry level 100cc bikes are available at 45 - 50k

So while the entry level cars/bikes have managed to absorb the inflation impacts & remained VFM, the upper segments have moved way beyond their initial price points

[Carma2017]

On an average, in India, the cost to build a Car typically is 50% of the price at which it is sold. The balance amount as already been captured is excise duties and taxes. This is a fact across Car makers. So, in a nut shell, I don't think cars are overpriced in India in terms of build cost but Selling price is a different matter.

Successive governments in India since the advent of time, have treated cars as Sin goods and hence the taxation even on fuel. In the short term to medium term, will this attitude change? I don't think so.