[ecenandu]

Originally Posted by nik hill

Your post appears to imply that people should lump whatever is unfair because it is part of the package. By that yardstick there shall never be a change in anything for the better. Moreover this advise of migrating to some other country if you don't like a particular thing over here smacks of a lot of similarity with utterly fake nationalist propaganda being pushed in the country.

When I read the quoted post, it resonated with what I had in my mind. We need to be realistic, understand the ground reality, in a country like India we need high taxation on car imports to safeguard the Indian automobile industry. Here, we are also talking about the tier 2,3 suppliers.

But I do get the gist of your post, all you are saying is not to be complacent, right.

[giri1.8]

Originally Posted by arit.mondal

Technology advancements throughout the years, automation and scale of production bring down the cost of production every year.
So this inflation adjusted price isn't the right benchmark for deciding whether cars are overpriced or not.

Plus cars of today are loaded with technology, but have flimsy built quality, poor paint finish, no part can be repaired i.e only replacement in case of failure! list goes on. One of my relative had a maruti 800 for 1980's to almost end of 2000's, imagine our current generation of cars!

On top of that, his car spent its entire life in a town with minimal technical support.

Car's touch screen lags so much behind our budget mobile phones, yet it's advertised as a premium option available only in the topend.

[Jeroen]

Originally Posted by nik hill

Your post appears to imply that people should lump whatever is unfair because it is part of the package. By that yardstick there shall never be a change in anything for the better. Moreover this advise of migrating to some other country if you don't like a particular thing over here smacks of a lot of similarity with utterly fake nationalist propaganda being pushed in the country.

No, that is your interpretation entirely. High taxes aren't necessarily unfair, they are part of the system. You lower one tax, something else has to give. Any government anywhere in the world needs to balance income with outlay. How well they do so, whether you agree with their priorities is a personal and maybe a political preference.

Within the system you can always optimize, but you can never improve one particular item without some concessions on other items. So if you want lower taxes on cars or income in any given system in the world something has to give. E.g. you buy less fighter planes, spend less on social well fare, spend less on education, reduce salaries of the public servants whatever.

So comparing car prices from one country to the next is as far as I am concerned completely useless unless you compare every component in the the respective system in each country.

Cars in Germany are considerable cheaper then here in the Netherlands. The VAT is just about the same, but the Dutch government slaps on additional taxes on top of the VAT. Is that unfair? Well, I don't think so, it is just part of how the total Dutch tax system works. And overall I dont think the Dutch system is perfect but I think it is better then most. So I wont bitch about the fact that in Germany my car would cost considerable less.

To change something like taxation because it is supposedly unfair and to think it can be done without consequences is just naive in my opinion.

If you like to know my stance on why I think people should immigrate and what I think increases the chances of you migrating successfully, please visit the respective thread on this very forum. It has utterly nothing to do with nationalism and all to do with a lot of published research, human behaviour and my own experience having lived and worked all over the world.

Being negative without offering practical solutions on how something should be improved is simply something I do not appreciate and subsequently such individuals I would rather see very far removed from whatever place I happen to call my home at the time and or enjoy in general.

In any county irrespective of the actual taxes there is always a fair number of people who bitch and moan about the taxation. Very few offer realistic options on how to improve the situation. You will appreciate that just lowering taxes on cars and income tax is not as simple as that. So I simply do not have much patience for such arguments. I think they are selfish, over simplified, naive and totally unrealistic. just one old git's opinion, of course.

People who just want more for their own purposes and don't want to think it through what it might mean for others or society at large I do not have much patience with.

In democracies everything is a concession. How often they collect your garbage, if at all, how much you pay for fuel, how much tax on your car etc.



Jeroen

[bansal.sushant]

Originally Posted by V.Narayan

In 1990 I bought my first car a bucket-seat floor-shift Premier Padmini for Rs 200,000 or so. The INR has depreciated ~6.5 times since then. This makes that Padmini priced at ~Rs 13 lakhs in today's money - a top end Yaris - picked that as it is a hotly debated topic. What does that get us in terms of a car today and how far ahead of the Padmini would a car priced at Rs 13 lakhs be on all points of comparison? Fact is we get a lot more bang for the buck today in automobiles than ever in this country's history and it is only getting better. Let's take another example. In 1996 I bought my first luxury car or what was amongst the top end cars built in India in those days - the Daewoo Cielo for I think about Rs 6 lakhs with all the bells and whistles. In today's currency that is ~Rs 23 lakhs. At Rs 23 lakhs one gets a lot more than a Cielo today - Octavia?.

Sir, this question has been in my mind for a long time, when you bought the Padmini, you were probably one of the very few who would be owning a car, hence that would have attracted massive respect and exclusivity, as opposed to buying a Yaris in today's time. Similarly, buying a Cielo in 1996 would give you unparalleled exclusiveness and a few IT raids , would Octavia provide even a fraction of that? I don't think so. To get the same exclusiveness you would probably need to buy one of the luxury Germans costing 40lakhs+, should this factor not be considered?

[rdst_1]

Originally Posted by Jeroen

People who just want more for their own purposes and don't want to think it through what it might mean for others or society at large I do not have much patience with.

Your point definitely makes sense.
However you have to see things from other people's perspective as well.
Most of the salaried class has every right to crib about these taxes as they don't get much in return for what they pay.
The government definitely has to take care of the less fortunate with the taxes they get, but since you have lived in India, you must have witnessed first hand, the state of services one gets from the government over here. There are exceptions, but the govt over here constantly fails to provide the basic infrastructure when it comes to roads, electricity, education and health. So, if someone has to pay for all these basic necessities at exorbitant rates themselves, then they will definitely make some noise when the govt pushes them even more with high tax rates.

So, if you look from their perspectives, it is natural to try and worry about themselves first because they know that they can't rely on the government.

I live in one of the few states of India that sells electricity as it has surplus power. And yet, the state government can't ensure a regular supply. My region sees no snow so there isn't even that excuse for them. The transformer is overloaded and my house being the last one on the line faces regular low voltage conditions. Despite, the executive engineer(XEN) of the electricity department being my relative, it has been more than an year since I applied for a 3-phase connection so I could start my business. He has done all the documentation etc but the department can't seem to scrape together 16k to install 2 poles so that the supply can travel 100m to my house and this is after I will be paying from my pocket for either a stabilizer or a transformer which will cost around 40k. And still, I am much better off than 95% of the people who live in other states of India when it comes to electricty supply.
The local schools are a mockery and a decent hospital which has an X-ray machine is more than two hours away. The Ambulance takes 30 minutes just to reach to you and there are no paramedic staff to even give first aid. It's just a driver and a bed with an oxygen tank.

So when I have so much to worry about and spend money on even the basic necessities, when will I get the time and the money to worry about the society.

[V.Narayan]

Originally Posted by Jeroen

Various countries have similar stiff tax levies on cars ( e.g. Sweden, Finland, the Netherlands) and we could only dream about paying only 30% income tax. I am currently in the close to 60% income tax bracket.

You can't just pick and choose. Like I will have German car tax, USA income tax and Saudi property tax and Mediterranean climate. You get the full package with all the pro's and con's of each respective country. You don't like it, migrate!

If cheap cars and low income tax is all you require move to the USA. Or Dubai whatever. And except the good and the bad and stop wincing!

+1 to that. Well said.

Originally Posted by Jeroen

No, that is your interpretation entirely. High taxes aren't necessarily unfair, they are part of the system. You lower one tax, something else has to give. Any government anywhere in the world needs to balance income with outlay. How well they do so, whether you agree with their priorities is a personal and maybe a political preference.

Within the system you can always optimize, but you can never improve one particular item without some concessions on other items. So if you want lower taxes on cars or income in any given system in the world something has to give. E.g. you buy less fighter planes, spend less on social well fare, spend less on education, reduce salaries of the public servants whatever.

So comparing car prices from one country to the next is as far as I am concerned completely useless unless you compare every component in the the respective system in each country. To change something like taxation because it is supposedly unfair and to think it can be done without consequences is just naive in my opinion.

In any county irrespective of the actual taxes there is always a fair number of people who bitch and moan about the taxation. Very few offer realistic options on how to improve the situation. You will appreciate that just lowering taxes on cars and income tax is not as simple as that. So I simply do not have much patience for such arguments. I think they are selfish, over simplified, naive and totally unrealistic. just one old git's opinion, of course.

. Well said again Jeroen. Too many people in most countries (but it is an epidemic in upper middle class India) crib with no solutions or even bothering to know the facts some of which I lay out later in this post.

Originally Posted by rdst_1

Most of the salaried class has every right to crib about these taxes as they don't get much in return for what they pay.
There are exceptions, but the govt over here constantly fails to provide the basic infrastructure when it comes to roads, electricity, education and health. So, if someone has to pay for all these basic necessities at exorbitant rates themselves, then they will definitely make some noise when the govt pushes them even more with high tax rates.

Originally Posted by nik hill

Your post appears to imply that people should lump whatever is unfair because it is part of the package. By that yardstick there shall never be a change in anything for the better.

You are entitled to your point of view and your frustrations against India. But before we go further let us look at the facts. All figures for year ended March '17. The personal income tax collected by the Government was about Rs 3.53 lakh crores (Rs 3.53 trillion) which is about 14% of the Govt's annual receipts. The non-direct taxes and receipts which hit all (the rich like you & me and the poor equally) were 43% of the total budget. If to that we add corporate tax which all affects all equally through pricing of goods then that 43% goes up to 62%. So first let's lay to rest this bogey that we the suffering rich/upper middle class who pay tax deducted at source bear an inordinate share of Govt's cruelty of collecting taxes. We don't. So get real.

Another fact - 37 million Indian filed for income tax - they represent about 22 million families* out of the ~240 million households in India as per World Bank. So where income tax is concerned 9% of the households, who are the better off, pay 14% of the Govt's budget through income tax. What's so out of whack with that?? On this august forum I often see writers bitch and moan about 37 million income tax payers supporting the 1300 million. Let's move away from the myth and look at the data beneath - please.

Are our Govt provided services up to the mark - not quite and in some cases pathetic - mainly water and education. They can improve, Some have improved. And sensibly the Govt and the present generation of bureaucrats under stand that less Govt is better. Things have changed a lot in 25 years including the way bureaucrats behave with people today versus say 1990. Cars are a high end item in our country where a large percentage still live below the poverty line and till then I at least am pleased to pay the taxes on cars.

To know what's happening in your country read the Indian language newspapers.

Originally Posted by giri1.8

...cars of today ....have flimsy built quality, poor paint finish, no part can be repaired i.e only replacement in case of failure! list goes on.

As some one who has been driving cars since 1979 and owning them, in India, on his own dime since 1990 I cannot disagree with you more. I assume our points of reference are rather different.

Originally Posted by bansal.sushant

Sir, this question has been in my mind for a long time, when you bought the Padmini, you were probably one of the very few who would be owning a car, hence that would have attracted massive respect and exclusivity, as opposed to buying a Yaris in today's time. Similarly, buying a Cielo in 1996 would give you unparalleled exclusiveness and a few IT raids , would Octavia provide even a fraction of that? I don't think so. To get the same exclusiveness you would probably need to buy one of the luxury Germans costing 40lakhs+, should this factor not be considered?

Great point. But not related to pricing of a product like for like adjusted for inflation. Our whole society is changing, real salaries have gone up several times in 30 years especially for the top 20% of society to which we all belong. So to get the same exclusiveness we need to spend more but that is because India has made economic progress - it is a golden problem to have. My first salary from a top business house in India in 1982 was Rs 1520/- a month [about Rs 15,000 today]. What does an MBA graduating from one of India's top 5 or 4 business schools draw today on day one? I see it in the wages I pay to entry level engineers today versus 20 years back.

* all figures from Govt sources. Nos of households who pay income tax is an estimate by a research body.

[rdst_1]

Originally Posted by V.Narayan

Are our Govt provided services up to the mark - not quite and in some cases pathetic - mainly water and education.

Let me point out that even I don't have any problems with paying these taxes.
You have only quoted the stats when it comes to collection of the taxes. What about statistics on how these taxes are utilized. That is what I and many others have a problem with. Everyone knows that there is gross mismanagement and inefficient utilization of the money government collects as taxes.
Now if I am an honest taxpayer, why do I have to again spend so much of my time and energy and money to run around courts to hold the government accountable for it's inefficiencies and corrupt practices.
All I ask is that the money gets utilized for what it is collected and not go in the pockets of politicians and beureaucrats like it does now. And until then, I would definitely be vocal about how are high tax rates are an injustice on the people.

P. S. - I am going to give you a small example over here. In my state, Himachal, it has recently come to light that the government diverted funds from the State Disaster Relief Fund to refurbish government offices and residences. Now, it wouldn't have been an issue if they hadn't, at the same time, denied assistance to nearly 300 families who lost their homes to natural calamities like cloud burst etc citing budget issues as the reason. As an honest taxpayer, things like these make my blood boil.

[timuseravan]

Originally Posted by V.Narayan

Another fact - 37 million Indian filed for income tax - they represent about 22 million families* out of the ~240 million households in India as per World Bank. So where income tax is concerned 9% of the households, who are the better off, pay 14% of the Govt's budget through income tax. What's so out of whack with that?? On this august forum I often see writers bitch and moan about 37 million income tax payers supporting the 1300 million. Let's move away from the myth and look at the data beneath - please.

Filling income tax is not the same as paying tax! Almost 50% of the people who file do not have any tax liability at all. And of the people who actually pay, again almost 50% have a liability of less than 1lakh.
So the calculation of 9% households paying 14% of the tax is just not correct. Per my rough guessestimate, it is 3% of the households who are paying 10-12% of tax.

Originally Posted by V.Narayan

The non-direct taxes and receipts which hit all (the rich like you & me and the poor equally) were 43% of the total budget. If to that we add corporate tax which all affects all equally through pricing of goods then that 43% goes up to 62%.

I would also argue that we end up paying more indirect taxes as well. We typically go for better quality of goods, cars, hotels etc etc which are more expensive and have more tax rates. Hence we end up paying more total amount.

There is an old joke where a bank robber is asked why did he rob a bank . He answers: "Because that is where the money is"
The fact of the matter is Govt hits us because we have the money (and no political power) - fairness does not come into the picture at all.

Originally Posted by V.Narayan

Are our Govt provided services up to the mark - not quite and in some cases pathetic - mainly water and education. They can improve, Some have improved. And sensibly the Govt and the present generation of bureaucrats under stand that less Govt is better. Things have changed a lot in 25 years including the way bureaucrats behave with people today versus say 1990.

This I agree. Although pathetic, services are slowly improving.

[ksameer1234]

Great discussion here! While it does pinch to see tiny hatchbacks touching a million rupee price on-road, it can't be denied that the right price for anything is one you are willing to pay (not my words, but can't recollect where I read this). There are cars which are cheaper than segment leaders and yet can't manage to come anywhere close in terms of sales. Why? Because people just don't buy cars with only the sticker price in mind. Tata Tigor may offer all that Maruti Dzire does at a significantly less yet doesn't even dent Dzire sales. Ford Figo, Tata Hexa are some other examples.

At the risk of repeating what people have already said, cars sell at the price they do because people are willing to pay for them. There have been some truly overpriced cars, what happened to them? They had price cuts, deep discounts and what not.

In the end, it is a reasonably free market and manufacturers are free to demand prices they deem fit. A lot of effort and money goes into building a brand and then benefits are reaped in the form of charging premium over competition.

[Aroy]

I think that car prices in India have maintained parity with International Prices. What we tend to ignore is
. The dollar has zoomed from Rs.5/ in sixties to Rs.66/ now and increase of 15 times. Even based on 1991 the increase is more than 3 times.
. Technology and equipment in cars has also increased.
. The Road Taxes which were below Rs.5,000/ in early nineties have zoomed inflating On-Road prices.

Here are some prices that I remember :

. In late sixties Rolls Royce was USD 25,000/ today it is touching 250,000, that is ten times increase. Dollar was only Rs.5. Today dollar is Rs.66!.
. I bough Maruti 800 in 1991 for around Rs.1,20,000/. It had no AC but I paid for a heater. In 2010 I bought an Alto K10 for Rs.3.5L. The dollar was 20 in 1991 and is now 66. So from that point of view I get a better car at similar price.
. Similarly prices of luxury cars have increased by 3 to 4 times (and not more) compared to 1990.

In short if you factor in Inflation and Depreciation of Rupee, prices in India pre taxes are very competitive with the International prices.

http://fxtop.com/en/historical-excha...18&btnOK=Go%21

http://fbinvestigations.blogspot.in/...d-in-1917.html

[peus017]

Originally Posted by CrAzY dRiVeR

IMO - Is the maximum price a customer would be willing to pay for the product.

An overpriced product is when a majority of prospective customers feel that the premium demanded by the manufacturer is beyond reason or logic.

You just can't put a hard and fast rule around it, nor explain it with inflation and such factors - because the maximum price a customer would be willing to pay is decided by many social factors too - Like brand, social perception, exclusivity etc. Some products are even overpriced on purpose because the customers desire it to be so!

Thats the point ! So with every coming years these factor change and influence the price. I agree Customer willingness to pay is accounted for but with Cars its "a segment of Customers" which again is based on the robustness, usefulness and quality of the product. I can relate to Apple products - when the customers want it to be overpriced and that becomes a status in itself

Originally Posted by arit.mondal

Technology advancements throughout the years, automation and scale of production bring down the cost of production every year.
So this inflation adjusted price might not be the right benchmark for deciding whether cars are overpriced or not.

True for a assembly line which doesnot undergo any change. But with feature rich cars, safety aspects upgraded, technological advancements, R&D and labour I guess the cost of production itself shoots up. Inflation just helps to project the overall numbers around the horizon, it might not be accurate but approximately it guides us.

Originally Posted by kiku007

Let me add a new twist.

1. Tax sops? Automakers have got land at throw away prices and Tax holidays for years together.

2. Labour cost compared to the rest of the world? Low. Don't even talk about the crushing healthcare costs they have abroad.

3. Investment on R&D specific for India? Meh.

4. Investment on meeting emission standards? No problem. Let's blame the fuel quality and lack of public awareness.

5. Costs associated with environmental protection and management? Well I don't know. But check how much GM was fined in India for the Tavera engine pollution fraud.

6. Warranty costs? Lol. Sell third year warranty for a price while rest of the world gets 7 years standard in many cases.

And cars cost more in India?

I can't imagine how much more cars would cost if tax sops are gone and a couple of other factors (mentioned above) start becoming relevant for India.

Nailed it !! Couldn't agree more. I believe the dealer network and margins fill for the rest

[drmohitg]

There are always two sides to the coin. On one hand I agree that the right price is what the customer is willing to pay. But in case of cars, it might not be always true or as easy to apply. The way the car makers have hiked prices recently specially in the C segment and hatchback segment is not justified. Or the Innova costing 25L for that matter. The customer is not paying that much money willingly but is rather forced to cough up as there is hardly any choice. And almost all car makers unite and increase prices similarly.

So considering the smartphone market example, for a buyer there is always a lesser prices One plus or Samsung for every Apple product, but it is not the same in the car market.

[ashlil]

Originally Posted by Jeroen

-SNIP-
You don't like it, migrate!

-SNIP
If cheap cars and low income tax is all you require move to the USA. Or Dubai whatever. And except the good and the bad and stop wincing!

Jeroen

Not really the only option, is it? There are several options like

1) Migrate (changes nothing)
2) Stay here and bitch and moan (Very important right in a democracy. In fact this brings in change)
3) Take active steps to change things you do not like (Form a political party, put hoardings).

So, why migrate? Why not bitching and moaning?

Originally Posted by Jeroen

Being negative without offering practical solutions on how something should be improved is simply something I do not appreciate and subsequently such individuals I would rather see very far removed from whatever place I happen to call my home at the time and or enjoy in general.

By your logic nobody should complain of pain from cancer unless they know the cure. And also how far an individual can be removed is not your call, nor your right.

Originally Posted by Jeroen

People who just want more for their own purposes and don't want to think it through what it might mean for others or society at large I do not have much patience with.

Please understand that it is not the responsibility/duty of other people to improve your patience. You can criticize their perceived selfish ways, but you cannot hold them responsible for your lack of patience.

Originally Posted by Jeroen

In democracies everything is a concession. How often they collect your garbage, if at all, how much you pay for fuel, how much tax on your car etc.

Very narrow characterization of democracy. In fact, you have to accede to more concessions in a dictatorship. A broader characterization of democracy would be the right to bitch and moan openly without the fear of being persecuted (a right, you seem to disapprove).

[peus017]

Originally Posted by V.Narayan

+1 to that. Well said.

. Well said again Jeroen. Too many people in most countries (but it is an epidemic in upper middle class India) crib with no solutions or even bothering to know the facts some of which I lay out later in this post.


You are entitled to your point of view and your frustrations against India. But before we go further let us look at the facts. All figures for year ended March '17. The personal income tax collected by the Government was about Rs 3.53 lakh crores (Rs 3.53 trillion) which is about 14% of the Govt's annual receipts. The non-direct taxes and receipts which hit all (the rich like you & me and the poor equally) were 43% of the total budget. If to that we add corporate tax which all affects all equally through pricing of goods then that 43% goes up to 62%. So first let's lay to rest this bogey that we the suffering rich/upper middle class who pay tax deducted at source bear an inordinate share of Govt's cruelty of collecting taxes. We don't. So get real.

Are our Govt provided services up to the mark - not quite and in some cases pathetic - mainly water and education. They can improve, Some have improved. And sensibly the Govt and the present generation of bureaucrats under stand that less Govt is better. Things have changed a lot in 25 years including the way bureaucrats behave with people today versus say 1990. Cars are a high end item in our country where a large percentage still live below the poverty line and till then I at least am pleased to pay the taxes on cars.

T.[/i]

The whole tax thing reminds me of a forwarded message -
"Suppose that once a week, ten men go out for beer and the bill for all ten comes to £100. If they paid their bill the way we pay our taxes, it would go something like this...

The first four men (the poorest) would pay nothing.
The fifth would pay £1.
The sixth would pay £3.
The seventh would pay £7.
The eighth would pay £12.
The ninth would pay £18.
And the tenth man (the richest) would pay £59.　
So, that's what they decided to do.

The ten men drank in the bar every week and seemed quite happy with the arrangement until, one day, the owner caused them a little problem. "Since you are all such good customers," he said, "I'm going to reduce the cost of your weekly beer by £20." Drinks for the ten men would now cost just £80.

The group still wanted to pay their bill the way we pay our taxes. So the first four men were unaffected. They would still drink for free but what about the other six men? The paying customers? How could they divide the £20 windfall so that everyone would get his fair share? They realized that £20 divided by six is £3.33 but if they subtracted that from everybody's share then not only would the first four men still be drinking for free but the fifth and sixth man would each end up being paid to drink his beer.　

So, the bar owner suggested that it would be fairer to reduce each man's bill by a higher percentage. They decided to follow the principle of the tax system they had been using and he proceeded to work out the amounts he suggested that each should now pay.

And so, the fifth man, like the first four, now paid nothing (a100% saving).
The sixth man now paid £2 instead of £3 (a 33% saving).
The seventh man now paid £5 instead of £7 (a 28% saving).
The eighth man now paid £9 instead of £12 (a 25% saving).
The ninth man now paid £14 instead of £18 (a 22% saving).
And the tenth man now paid £49 instead of £59 (a 16% saving).　
Each of the last six was better off than before with the first four continuing to drink for free.　

But, once outside the bar, the men began to compare their savings. "I only got £1 out of the £20 saving," declared the sixth man. He pointed to the tenth man, "but he got £10!"　
"Yeah, that's right," exclaimed the fifth man. "I only saved a £1 too. It's unfair that he got ten times more benefit than me!"　

"That's true!" shouted the seventh man. "Why should he get £10 back, when I only got £2? The wealthy get all the breaks!"　

"Wait a minute," yelled the first four men in unison, "we didn't get anything at all. This new tax system exploits the poor!" The nine men surrounded the tenth and beat him up.　

The next week the tenth man didn't show up for drinks, so the nine sat down and had their beers without him. But when it came time to pay the bill, they discovered something important - they didn't have enough money between all of them to pay for even half of the bill!　

And that, boys and girls, journalists and government ministers, is how our tax system works. The people who already pay the highest taxes will naturally get the most benefit from a tax reduction. ":

[sajo]

Yes, cars are definitely moving up the price ladder.

A few years back, I bought a Swift ZXi for 5.XX Lakh Rupees.
With rising (hahaha!) incomes, the next logical price point for me to "upgrade" a few years down the line (ie, now) would be between 8-9 Lakh rupees.
Guess which car I can now buy in that segment at the "upgraded" price point : the Swift ZXI!

At this new price point, I am getting nothing which would qualify as an upgrade. I am assuming the story is similar for many other urban middle class salaried folk?