[ramzsys]

The individual is busy earning and aspiring to buy/upgrade as per needs/wants. It is the duty of the policy makers to think in the larger perspective and guide the individual accordingly, with clear policies/laws.

For eg, with this population density, can we afford to become a nation of car owners? We don't see lane multiplication happening; primarily because 'blessed' citizens own the rent worthy lands adjoining the highway. Yet we are adding 1.5 lakh cars per month (and several lakh 2 wheelers).

An upgrade would usually be a larger car- Alto ->Swift ->Brezza; bhp and torque figures going up while the average speed in the urban spaces are coming down steadily.

The problem isn't population growth; it has slowed down a lot; it's rate of urbanization now. If everyone - auto manufacturers, government minting money via tax, car owners- want status quo to persist, we will (if not already) have a larger problem at our hands: lots of cars, no parking spaces, no space to drive, more jostle, more road rage, insurance premium spiking.

On a lighter note, this is like the courtroom scene of Chernobyl tv series, where the red cards keep piling up.

[mustangvins]

On the one hand, car manufacturers have been raising prices much more than inflation and input costs can justify and on the other hand, government is milking car customers by excessively taxing car buyers (57-64% = 28% GST + 15-22% cess + 14% Road tax ).

I agree that the government should not reduce tax rates or give auto companies incentives every time there is a slowdown or loss. The auto manufacturers have only themselves to be blamed for the current situation because during better times, they kept increasing prices unjustifiably. So in a free market environment, demand is automatically going to come down at some point until prices align with market expectations. But i don't see that happening in the current scenario and instead, auto bosses want the govt to intervene so that they can continue charging higher prices.

The government however should look at things from a consumer perspective and deliberate if the current tax structure and approach to taxation is justifiable. The total tax for most cars is in the 57-64% range and thats not fair to consumers by any yardstick. Not all cars are luxury any longer and two wheeler's should definitely not be treated as luxury product for taxation purpose. Even for expensive cars, the motive of taxation should not be to milk as much as possible from those who can pay but rather to simplify and bring in some rationalization in the tax rates.

Perhaps, a situation like this would push both sides to take a re-look and bring in appropriate changes.

[2cents]

Originally Posted by mustangvins

)

The total tax for most cars is in the 57-64% range and thats not fair to consumers by any yardstick.

Not to forget the income tax you have already paid. For a car that costs 10 Lakhs OR, you need to earn 14.5 Lakhs before tax. Considering the other taxes, GST, etc, roughly you have to earn 14.5 Lakhs for a 5 Lakh worth of car. Crumbs to the elephant, in the words of our Finance minister.

[rajvardhanraje]

While it is a fact that the government taxes on vehicles are exorbitant, the automotive manufacturers are no saints. I would blame both entities for the current crisis. Even if taxes are reduced to 18%, the price benefit to the customer will be short lived. In a few months the manufacturers will increase the prices at regular intervals and eventually the customer will end paying up the same amount. They would cash in the benefit at the cost of the government. This is something that the government will be well aware of and should be the reason why they are hesitant to reduce the taxes. The proportion in which car prices have gone up over the past few years are far more than the inflation or the cost of raw materials. Cars bought some years ago have moved up a segment price wise.

[SLK]

Finance minister made a statement which will make sure that consumers stay away from auto for the month of September as well.

https://www.businesstoday.in/sectors...ry/376731.html

It is unlikely to actually happen! but now everyone is only eyeing this and the showrooms run dry.

[Sunil2307]

Remember what the Maruti folks commented at the launch of Ignis trying to justify the high price tag, something to the effect of - People have enough money, and they will spend.
It was not an instance, it is the mindset. They kept on increasing prices, kept increasing their greed, and are in the situation they are in. Now they are crying victim.

Job loss is definitely a concern, but the auto manufacturers definitely need to fall in line as well.

[volkman10]

Nail in the coffin for the bleeding Auto Industry.

GST Fitment Committee Opposes Tax Rate Cut On Automobiles.

the GST Fitment Committee (a panel of officials from the GST Council, which discusses requests from various industries for GST reduction), says that reduction on GST rates for automobiles will lead to a major loss in revenue

https://auto.ndtv.com/news/gst-fitme...obiles-2097987

[AnandB]

Good. Manufacturers should price the vehicles correctly now instead of asking govt to lose its margin.

[chittybang]

It seems like most recommendations are to remove or reduce cess. I am in the market for a car and my stand on what needs to be done is fluctuating as I read the comments from many of our members. The underlying point though is that something had gotta give. A correction just needs to happen. Be it via cess , GST or price reduction. Seems like the auto industry has played it's cards and do not intend to correct prices. So now the govt will need to make a move. Either ways as a consumer the worst case scenario is ministers making vague promises and statements that stops us from making up our mind. This Sept 20 meeting surely had halted many bookings. The govt needs to make clear and definite comments. Right now I feel lost.

[fhdowntheline]

I support the view that 2-3 quarters of de-growth should not make the industry run helter-skelter. When your employees and other stakeholders in the chain have helped you in the good times, isn't it your responsibility to chin up and take it in your stride during the downturn? On a slightly related note, I wonder how many of the top brass of the Indian auto industry are actually shop-floor rated , grease-n-grime veterans. I am sure such people would take a benign and philosophical view, and have the courage to convince their boards. While the auto industry is a vital one, it isn't a 'critical to national interests' type of business (at least in passenger vehicle), as say, airline business. To that extent, the government should also take a pragmatic view without succumbing to the optics of the situation.

[saket77]

Maruti ‘s chairman Mr. RC Bhargava says that cars have become expensive and unaffordable.

https://m.timesofindia.com/business/...w/71057677.cms

For a change, many of us would agree with Mr. Bhargav’s comment in principle where many hatchbacks are almost toeing the 1 million rupee line. Where most of us will not agree is his argument that inclusion of safety features like airbags and ABS have increased the prices. In my personal opinion, if these features increase the prices, then so be it.

Also he opines that a GST cut will not help much. Some of the points he makes are though valid in my opinion. He says that Govt. increasing the registration charges, obscene salaries for the top management are other reasons for slowdown and losses in the sector.

[subraiyr]

I was in the market to buy a small hatchback for city runs, but now have indefinitely put it on hold. Thanks to our FM quoting millennial mindsets using car rental services, i find it insane to put a million bucks on a good hatchback with safety features and trims

https://www.ndtv.com/india-news/nirm...w-cars-2098704

The next 2 months will be a big test for the auto industry with the festival season approaching and the industry hoping that people will loosen their purse strings. However, little do they realize that they have probably outpriced themselves in the market and are now pushing for tax reliefs. How much of this will get passed on to the customers ?
As i keep maintaining, the marketing and ad spends by these guys are something they should look to reduce. Why would i want a sign off by Benedict Cumberbatch or Tiger Shroff when the engineering is what should keep the vehicle going !!! Beats me that we as customers end up putting money in the pockets of these actors while buying

[chittybang]

I am in the market for a new car but trying to hang on as much as I can. There is so much confusion especially with the GST or cess reduction roumors followed by denials. But ola and Uber aren't dependable. Sometimes it's hard to even get a car during peak hours. Add to it the peak pricing. Feels like everyone is out to extract their pound of flesh. I miss my car. It had sheilded me from everything. Always there for me be it peak hours, heavy rains, traffic and even natural calamities. Uber and ola are good but they are not gonna replace my car. What's the minister smoking to think that's why I haven't made a purchase. To be honest at this point it's her. She had made me wait and watch.

[Durango Dude]

Are the car manufacturers ready to shave off 10% of the ex showroom cost of the car?? That remains to be seen and there should be a freeze in escalating costs arbitrarily from the manufacturers side.

[sprocket]

Originally Posted by Durango Dude

Are the car manufacturers ready to shave off 10% of the ex showroom cost of the car?? That remains to be seen and there should be a freeze in escalating costs arbitrarily from the manufacturers side.

Skoda has tried this with the Rapid Rider variant. If you see, there is a growth of sales (~10%) for the Rapid even in this so called slowdown. Just shows that the concept of value still exists.

A base version of Rapid at 6.99L ex showroom is probably taxed at 28% (GST) + 20% (Cess). If this comes down by 20%, then the ex-showroom would be 5.88L.

The onroad price in Bangalore (including 56k as insurance) would come to:

1. @16% RTO: 7.38L
2. @10% RTO: 7.00 L

Compare this to the launch price of the base model as 10.25L on road. Personally, I am happy to see the manufacturers feel the burn. On the flip side I am sorry to see so many livelihoods come under stress.