[superbad]

Originally Posted by pganapathy

I have to seriously question that. Pretty much every car we own (my parents, my in-laws and me) are between 10 and 20 years old, possibly a bit more. None of them have reached the end of their useful life, though maintenance costs have increased due to some parts failing. However, when I consider the overall cost, it is still cheaper for me to hold onto these cars rather than purchase a new car.

Yes, I am sure that this mentality is contributing to the downturn in the auto industry. In all honesty, I doubt I would buy another new car until I move back to Coorg. As long as I am in Bangalore/Bombay, I would either purchase a used car or get one on lease/rent on demand

Originally Posted by bordeaux

Driving a 2009 Honda City Petrol with 150K kms on the Odometer (I bought it used in 2013 at 50K kms). Unless I have an itch to just throw away my money, this car is not going anywhere. The newer cars don't have much to offer in terms of ROI other than a few fancy switches here and there. They carry almost the same engine, same fuel efficiency etc. And even the maintenance costs are not that high compared to a new car. Best part is insurance cost is like 10% of what a newer car's insurance would cost.

Discarding this car at this time will be rather criminal wastage of resources.

Originally Posted by rdst_1

Majority of India doesn't live in overcrowded cities with long commutes. The rural and small towns also contribute a lot to auto sales where you don't drive a lot on a regular basis. Hell, my brother lives in Hyderabad and was in Bangalore earlier and his daily commute was barely 7kms to and fro. Such usage with a few outstation trips now and then would only result in a usage of 70k at most in 10 years. I currently drive a 2002 Fiat Palio with barely 1.5L on the odo and there is still nothing wrong with the car that I would need to scrap it.

So, the many people like I mentioned above would now consider not buying a vehicle in the first place if it is going to be scrapped within 10 years.

I think I'm misunderstood. I was replying to an earlier post that if a vehicle is to be scrapped in 10 years, there is no point in buying it; to that my reply was if you intend to keep a vehicle for that long a period, you have already derived a lot of usage & value from the vehicle. Any more usage is of course a bonus. In this case, resale value of the vehicle doesn't matter during the original purchase.

[rdst_1]

Originally Posted by superbad

I think I'm misunderstood. I was replying to an earlier post that if a vehicle is to be scrapped in 10 years, there is no point in buying it; to that my reply was if you intend to keep a vehicle for that long a period, you have already derived a lot of usage & value from the vehicle. Any more usage is of course a bonus. In this case, resale value of the vehicle doesn't matter during the original purchase.

I think you yourself have misunderstood the post to which you replied to. The OP had pointed out that some relative of his doesn't want to buy a new car because he will only be allowed to use it for 10 years. There is no talk about resale value over there. And I concur with that type of thinking and even I am not talking about resale value. Both him and I are talking about the intrinsic or usage value of the car which I determine by how much I have used that car.
You are again trying to say in this post that any more usage after 10 years is a bonus. Many others including me think that is not true. My own car was barely driven 60k kms in the first 10 years. In the 7 years after that, I have driven it nearly 100k kms.
Most people over here would agree that a car's life can easily be 20-25 years if taken care of properly. So, if suddenly, I am told that despite paying the same price, I can't keep using the car after 10 years, it will make me wary of making the purchase in the first place and that is what is one of the reasons for this slowdown in sales. We are not worried about the resale value, which itself depends on many factors including how popular the car was. We are worried that we won't be able to drive it enough in the 10 years because of our low daily commutes.

[nakul0888]

“ The auto sector is doing badly because all the carmaker’s are greedy and they are raising prices to rip off the poor Indian consumers”

Every time I hear this talking point I just want to pull my hair out. I mean really ? Every car maker is colluding with each other? Everyone? From Maruti to Mercedes? Even if that is the case ( it most certainly is not) look at where that got them? Their own balance sheet is getting hurt. One would assume that would make them reverse their policy. After all they are all greedy aren’t they? Do they care more about hurting Indians rather than their own pay check ?

It’s obvious that the slowdown of the Indian economy in general is the cause of this slump in sales. Official figures put our rate of growth at 6-7 percent. But there is significant doubt about those figures. Some say it actually is just 4-5 percent and has been for some years now. For an already advanced and developed country like US that number would be spectacular. But not for a poor developing country like India. All the major South east Asian tiger economies were growing at or around 10 percent year after year for multiple decades when they were in developing stages. We have yet to reach that kind of growth even now. Significant changes in our economic model will have to be made for us to get to that track. Mere slogans, statues, trimming around the bushes isn’t going to cut it

[Autolock123]

Apart from slowdown, another important aspect , probably one of the most impacting parameter is the liquidity crunch. If you look at the vehicle loan disbursements statistics, it has dipped significantly. Further to it NBFC's which are the main financing option for commercial vehicle buyers do not have funds to finance. Although govt. announced 70,000 crore bank recapitalization during union budget , the benefits are yet to percolate down. Repo rate has been cut thrice in 2019 however banks are unable to pass it due to higher deposit rates. If you see its a vicious cycle. On top of it, Govt. aspires to push EVs, hence we see so many benefits rolled out for EVs.

I don't think Auto industry is trying to rip the customers, Auto industry itself is transforming, today you see so many regulations are implemented ABS, Airbags, Reverse parking sensor, speed alert across all vehicles Prices are bound to go up. For an individual the ownership costs are also going up due to hike in insurance premium and now , vehicle registrations changes may be hiked to INR 5000. Rural India is already suffering which is one of major driver for incremental auto sales.

All said and done, i guess festive season and pre buying may help out auto industry. My take is, it may benefit PV but for CVs good times are still a bit away.

[Guna]

Originally Posted by pganapathy

I have to seriously question that. Pretty much every car we own (my parents, my in-laws and me) are between 10 and 20 years old, possibly a bit more.

I have 15 year old Chevy (Subaru) Forester and I have been looking to replace with a similar new vehicle. But the car is in such good condition, it can go for another 5 years. 10 year is too short a life span of a car. If that becomes a norm due to the law, car makers better design the cars only to last for 10 years and look to bring down the cost by 30-40%.

[jetsetgo08]

Originally Posted by Autolock123

Apart from slowdown, another important aspect , probably one of the most impacting parameter is the liquidity crunch. If you look at the vehicle loan disbursements statistics, it has dipped significantly.

+1, read a similar story in one of the local newspapers which mentioned that "It's not the automobile that sells, but it's the finance. If the finance doesn't sell then the automobile doesn't sell either."

[Maddy3008]

Although this video is in US context, it can be applied to India as well. Watch this video for another perspective of the auto doom we are witnessing:

https://www.youtube.com/watch?v=aUC6lsLr04I

Looking at the way EV sales curve in Norway has been, it moved from ~4% in 2014 to ~58% now, I kind of agree with the technology adoption curves shown in this video.

[ashlil]

Total sympathy with those 2 lakh auto dealership workers. However, no sympathy at all for auto manufacturers. They have, off late, been inclined to loot customers. For example, Hyundai Creta with less equipment (and less steel) sells for 2 lakhs more than comparable Hyundai Verna. Many, here are blaming the GST. But, GST is only on the value add. Are they passing the benefit of GST credit to customers? I don't think so since I never saw any price reduction due to GST compared to the sales tax and VAT regime (which together came to about 28%).

[Autolock123]

Originally Posted by Guna

I have 15 year old Chevy (Subaru) Forester and I have been looking to replace with a similar new vehicle. But the car is in such good condition, it can go for another 5 years. 10 year is too short a life span of a car. If that becomes a norm due to the law, car makers better design the cars only to last for 10 years and look to bring down the cost by 30-40%.

The question is not about the durability of vehicle, 10 year life span is imposed to reduce the emission. Today you have more BS III vehicles on road which are high on emission. You have got to take them off the road.

Also, One unique aspect which makes us different from other top auto countries is availability of resale market. Lot of Cars from US, Europe are exported to Africa and other countries however, we don't have such market available so a vehicle scrappage policy is a must.

[Slick]

Originally Posted by Maddy3008

Although this video is in US context, it can be applied to India as well. ....

Looking at the way EV sales curve in Norway has been, it moved from ~4% in 2014 to ~58% now, I kind of agree with the technology adoption curves shown in this video.

Wow, Thanks for sharing.

I doubt it to be as drastic as that in India though, unless the Government has something to do with it. The video though brings in an interesting analysis from an investment point of view.


I think, now, the auto industry is well aware of the situation and what the future holds in probability.

I expect heavy lay offs in the auto industry, current situation is just the tip of the iceberg. Even if they were to move to EVs they would hardly need this much task force to build EVs. Bad days ahead.


With all the banks in India having troubles with NPAs and the NBFC crisis, God knows where this ends.

- Slick

[sagarpadaki]

Originally Posted by bordeaux

Driving a 2009 Honda City Petrol with 150K kms on the Odometer (I bought it used in 2013 at 50K kms). Unless I have an itch to just throw away my money, this car is not going anywhere. The newer cars don't have much to offer in terms of ROI other than a few fancy switches here and there. They carry almost the same engine, same fuel efficiency etc. And even the maintenance costs are not that high compared to a new car. Best part is insurance cost is like 10% of what a newer car's insurance would cost.

Discarding this car at this time will be rather criminal wastage of resources.

Correct. The new 'mass market ' cars have nothing significant to offer to really be worthy of an upgrade after paying a significant sum of money.

Let us take an example of the Swift. 6 Years ago, it cost around 7.5 Lakhs OTR( depending on where you stay in India). It offered ICE,2 Airbags, 1.2 K series engine , 5 speed transmission, decent dynamics, mediocre safety. In 2019, same car costs 9L OTR for the ZXI+. Apart from a better ICE with integrated apple car play/android auto, different body shell, there is nothing worthy of an improvement. This is what is the trend across manufacturers of mass market cars . Now a 'logical' person(non petrol head) who has the 6 year old swift, if he walks into a Maruti/Nexa showroom and wants to upgrade, it would cost him/her approx 14L OTR for a ciaz or a brezza, which apart from being a different body shell and segment again are not having exiting features to be exited about.


There are cars who have made a good amount of improvement over the years but those are far and few in between.

[speedmiester]

Originally Posted by Maddy3008

Although this video is in US context, it can be applied to India as well. Watch this video for another perspective of the auto doom we are witnessing:

Looking at the way EV sales curve in Norway has been, it moved from ~4% in 2014 to ~58% now, I kind of agree with the technology adoption curves shown in this video.

A great perspective on the Auto doom.
I am one of those people who are waiting for an EV to replace my ICE car for good. My current car is 3 years old and will replace it with only an EV. Hyundai Kona is definitely on my radar, but will wait to see how Hyundai utilizes it's network of service and dealership in providing charging infrastructure.
We have booked an Petrol Hatchback and awaiting delivery, this will serve as a backup for all extended drives which are out of range in the EV.

[redohabitat]

Cab services like Ola, uber and self drive companies, are also a major reason for reduction in sales of new cars. Several millennial people don't feel the need to spend seven digits on a commodity that has to be scrapped in ten years.

[pganapathy]

Originally Posted by Autolock123

The question is not about the durability of vehicle, 10 year life span is imposed to reduce the emission. Today you have more BS III vehicles on road which are high on emission. You have got to take them off the road.

If you actually do the math on it, an old car will net less emissions overall. Producing a car is fairly polluting and it really needs a new car to run a lot of kilometres before the emissions are less than the overall emissions of the old car

[JishD]

Most of the well accepted cars in the Indian market are at the end of their product lifecycle - the higher end of the market (+10 lakhs ) is cognizant of this. The lower end churn towards higher end is not possible due to car prices rising exponentially at the higher end. As an average middle class Indian I am struggling to find a replacement for my Polo GT in the 15 lakh range ! Willing to put in the monies , but there's no car to be found till 20+ !