[Iyencar]

As someone who is flirting with getting a car home, I have no sympathy for these guys. A young middle class couple starting out in life and wanting to buy a new car would need a budget of atleast 7 lakhs. Buy a car less than this and you end up compromising with silly stuff like rear parcel trays, weak engines, no power windows, rear defoggers/wipers, fog lamps and heck even airbags, etc. etc. depending on the car and model you choose. That is ridiculous and around 1.5 to 2 lakhs more that what should be a fair price for the hatchback segment. Even after shelling out 7 lakhs, there is not one single crash test rated vehicle with a decent engine option all the way until the Nexon and Brezza which cost more than 9 lakhs for a decently specced model. Worse, if we can look at a loan of approx 5 lakhs, then that translates into an emi of 16k for 3 years or an interest payment of more than a lakh for 5 years. That is insane and money better spent on a house or for a child's education. Used to be that between safety, fun, and cost you could choose 2 options but not all (not ideal but still ok). Today you can only choose one option.

[Turbohead]

I believe it's only because the manufacturers have overpriced their models to ridiculous levels.

Customers who bought their cars 5 years ago, even if they extend their budgets and EMI's will still end up with the same model or the same segment.

Case in point being the C segment: The top-end Vento diesel in 2014 costed only 11.5 lakhs. After 5 years, if the customer decides to sell his car and buy a new car with a budget over 50% of the previous budget will still get him only a Vento, City, Verna top-end at 17 lakhs.

Now why would anyone pay more to get a relatively similar car? If the budget is any less, it will be a downgrade.

It would be cheaper to maintain and run the existing car for another 5 years inclusive of all major services and repairs.

[thoma]

How about the new dealerships of MG and Kia? Are they being accounted against these numbers?

Originally Posted by GTO

It's a bloodbath, guys. Even if we look at month-on-month comparisons, Maruti lost 20% sales in April 2019 (vs April 2018).

Is it all downwards from here? Our statistics give a better picture. The above is just a month-on-month comparison, in my opinion we should be analysing the yearly trend:

Originally Posted by PGA

I have tried to be a hack economist and collated some data from our monthly 'Cars Sales Figures and Analysis' thread.

You beat me to it. I was on this topic in the morning, but got held up in other chores.

P.S: I was just trying to find something positive. Can't predict the future though.

[gopalnt]

Originally Posted by Turbohead

I believe it's only because the manufacturers have overpriced their models to ridiculous levels.

Customers who bought their cars 5 years ago, even if they extend their budgets and EMI's will still end up with the same model or the same segment.

Case in point being the C segment: The top-end Vento diesel in 2014 costed only 11.5 lakhs. After 5 years, if the customer decides to sell his car and buy a new car with a budget over 50% of the previous budget will still get him only a Vento, City, Verna top-end at 17 lakhs.

Now why would anyone pay more to get a relatively similar car? If the budget is any less, it will be a downgrade.

It would be cheaper to maintain and run the existing car for another 5 years inclusive of all major services and repairs.

Agree with all of the above. Add to that the perceived quality of the cars have not changed either, even though the prices have changed a lot. Maruti gave us tin cans before, giving the same even now. Hyundai has a perceived better quality than Maruti, but that has remained the same over the years. As you have said, if my budget was about 10-15 lakhs 3-4 years ago and its the same even now, I will have to buy a lesser variant of the same car with no added features.

[gauravanekar]

When I was looking for the cheapest car with 2 airbags in 2015, I had only 2 options Liva and Figo at the entry point. I ended up buying Figo. After buying I realised that the petrol engine in figo is very uninspiring. At that point of time I though I shall use this car for 3 years and replace it with a more lively hatch (safe too). Unfortunately, after 3 years I find that its not worth selling & replacing this car for such a huge amount of money for very minimal added advantage.

Usage of even a little bit of logic will assuage us from upgrade plans in today's scenario. If the family is getting bigger or if someone is moving from state to state, then there is some case for changing car, otherwise no.

[RM Motorsports]

India's car stocks have lost $42 billion in value in the last 16 months, and some analysts say the rout may not be over.

Passenger vehicle growth in the financial year ended March was the slowest since 2014, according to the Society of Indian Automobile Manufacturers. Maruti Suzuki, the nation's largest by market share, slid for seven days through Tuesday after saying April revenue declined 17 percent from the year-ago month.

https://www.ndtv.com/business/auto-s...ome-topstories

[alpha1]

Originally Posted by ambujlal

Off the topic thought: Is an economy purely based on consumption and only consumption, be it automobiles, phones, TVs, or other gadgets sustainable? I don't know whether I should be happy that car sales are going down or be sad that jobs are at stake? A subdued auto sector means lesser cars, lesser smoke, lesser oil consumption (even it is for a few months). Or do I even have the moral right to pass judgment here when I myself drive to the office in a car? I guess I am probing the borderline where the economy meets philosophy and sustainable development

Yes, everything in economy is based on consumption.
We buy something that someone else sells because we ourselves are unable to make it.
This transaction is recorded in the gross domestic product.

Economic slowdown means that people are not consuming as much as one would expect them to - which means either they don't have sufficient money right now, or they are scared to spend now and end up in penury in future.

Homes and vehicles are two biggest ticket expenses a consumer makes - therefore is a good reflection of sentiments of the public.

[octane_100]

My take on this is that businesses in India have largely been run as a "JUGAD". Highly leveraged balance sheets, fund diversions and no fear of repayment. One of my professors always used to say that you can find sick industries in India but not sick businessmen! These have built up a bubble which is now being deflated with increased focus on compliance and pressure for repayment from financial institutions. I don't foresee the situation improving immediately. Economy has to find its natural ground only after which we can probably see a rebound.

[Motard_Blr]

I went through the entire thread but I don't think I saw inflation mentioned anywhere.

Here's the effect of inflation:
If you bought a car for 10 lakhs 5 years ago, assuming an average annual inflation of 6% (this assumed, so no arguments allowed on this!), That's the equivalent of about 13.4 lakhs today. However the same car (ignoring increased equipment levels) today actually costs about 16 lakhs. This equates to an inflation rate of about 10%! This is much higher.

I think that part of the reason for this inflation is because of demand - more people buying cars, more people demanding better cars. All this increase in business attracted a lot of people who were lured by the promise of easy money and the glamour of the car industry. Now that supply has exceeded demand and easy money has run dry, the newcomers are feeling the heat and running.

[cijo]

Originally Posted by Iyencar

As someone who is flirting with getting a car home, I have no sympathy for these guys.

This is exactly I think . Thanks to our great taxation policies. Manufacturers trying to keep the cost down because the on road price of a car is humongous after the GST, road tax and various Cess added up. So they obviously reduce the quality , strength , safety and features . End of the day we "The Customers" are getting a cheap strip down car for a stratospheric price

[Carpainter]

I think this was bound to happen. First of all these has been a tremendous rise in car sales over the last few years so a correction had to happen. Then again this being an election year as other bhpians mentioned before, these is a slowdown in the last couple of months. But the most important contributing factor to this slump is the upcoming BS-6 norms. If I were to buy a car this time around, I'd have definitely waited a few more months to get the latest engine. The uncertainty over the future of diesel cars is also a big factor. And then, obviously, the ever increasing price trend by virtue of which cars have taken a jump from one segment to another. City now cost more than what Civic used to cost 6 years ago and Civic now cost more than what Accord used to cost in the past. All these have contributed to the slump but I think it will get better in the next year may be when BS6 will hit the market.

[NAVREVV]

I reckon manufacturers are to be blamed for this. The pressure under which Indian manufacturers are currently reeling under making them do blunders including over stocking their dealers under wholesale pressure and end result is dealers not able to churn their stock at a faster pace as expected is only resulting in burning their money by paying huge interest costs on inventory lines availed from banks. Result: Dealers getting shut! Sad scenes for Indian Automobile sector. Indeed!

[guptad42]

Originally Posted by Turbohead

I believe it's only because the manufacturers have overpriced their models to ridiculous levels.

Customers who bought their cars 5 years ago, even if they extend their budgets and EMI's will still end up with the same model or the same segment.

Case in point being the C segment: The top-end Vento diesel in 2014 costed only 11.5 lakhs. After 5 years, if the customer decides to sell his car and buy a new car with a budget over 50% of the previous budget will still get him only a Vento, City, Verna top-end at 17 lakhs.

Car makers keep saying "rising input costs", but the prices of major metals and plastics were actually higher at the start of this decade (in 2011) than they are now!

And if they want to point to more technology in the cars, well technology hardware and software has been getting cheaper every year. Todays 10K Android phone is much faster and has better display than a 20K rupee phone from 2011.

[stanjohn123]

Like most have said, thing's are not going to get better for the auto market in India and that's bad news for us enthusiast's. Because now auto makers won't bring us newer and better models and wait till sales pick up.

https://www.ndtv.com/business/auto-s...e-over-2032293

[speedmiester]

Originally Posted by stanjohn123

Like most have said, thing's are not going to get better for the auto market in India and that's bad news for us enthusiast's. Because now auto makers won't bring us newer and better models and wait till sales pick up.

That will be a major folly as people will have no reason to buy if there are no new offerings in the market.
Slowdown is here for sure. Only the bravest and with deep pockets will tide over the crisis for sure.