[aargee]

Just came across these news & found, we're not alone!

[smartsubrat]

The VFM tag has vanished from the Indian auto market.
Auto makers need to introspect themselves about insane pricing of vehicles.

[yamaniac]

Originally Posted by ZenMaster

Let's keep the old one for longer or use Uber etc.

Totally agreed! I was thinking of Selling My Automatic Celerio and upgrading to the venue. But looking at the economy, Insurance Premiums, Traffic Jams, etc. I have no plans of buying a new car anymore.

I had taken a test drive of a few vehicles I had zeroed in on buying. The sales reps are now pestering me throwing in additional discounts etc and whatnot. In spite of telling them that all plans to buy a new car has been dropped. One sales rep is literally begging us to buy one or else he may lose his job. This is the state of what the automobile industry is going through.

Even living in a small city like Mangalore, I take an Ola to office and back. I can't take the additional stress of driving in the traffic either. Its total chaos on the streets. At the end of the day. There is nothing like peace of mind of not having additional financial burdens of EMI's on a car that you can no longer drive peacefully.

[CarJunki]

It so appears that expenditure growth has outstripped income growth. The effective tax rates and inflation together have played nice game. House hold savings rates in mid income families is on a downward trend. Unless it goes back upwards of 35%, very few families may be willing to indulge on high ticket items.

On the other hand automobile sector is pricing itself out of customers purchasing power.
Govt(s). have played their role of chief greed officer increasing taxes year after year.

The infrastructure and traffic situation is nothing to look forward to. Average traffic speeds in Bangalore CBD is close to 3km/hour. Average person walks at 5km/hour. Every time I am stuck in a jam it feels like being in depreciating investment sitting on road burning more opex (fuel) and reaching nowhere.

When all these are looked in combined view, no wonder automobile sales are down.

[Sebring]

The Government is easing me off my fuel of choice; Diesel. Petrol doesn't give me 'kick' and then the double whammy of high prices and low mileage. That leaves me knocking on the doors of 'electric'. Now, my experience with phone and laptop batteries tell me that these heat up, discharge rate is so high and can't keep it as stand by for a week without charging. Hybrids are not accessible and they're terribly expensive. Interest rates are high. Ola/Uber is really convenient, but don't pop up in rains or high-demand hours. Metro is really convenient, and 'last mile connectivity options like Bounce and Cycles are impressive. BS6 transition (for some reason) is throwing up challenges. Will my BS4 engine survive the day? Whichever way you look at it, it's doomsday for the average auto enthusiast.

[xway]

My two tid-bits on the issue plaguing the automobile industry -

1. Worldwide car sales are down not just in India, industry cycles which happen from time to time

2. Rent car mind set - due to cab aggregators, convenience of getting car and driver both at your fingertips, self drive cars, these coupled with lack of parking space, upfront investment, maintenance woes etc. pushing the new generation to rent it rather than buy.

3. Thriving and growing second hand or used car market - this was not active a while back but now its organized and even big brand names have joined in, even BMW Mercedes wannabe owners also don't mind buying second hand and saving money unlike earlier.

4. Market saturation - automobile industry has been growing in double digits since some decades now, i think most people who wanted a car have it by now and those who don't have options of rent, cabs, second hand opened. no longer is car considered as a snob value like before.

5. Over milking by car companies and government both, due to huge demand supply gap earlier car prices sky rocketed while skimping on features with every new release, not to mention government too played around with taxes as much as they can getting a free run. consumers do not see as much value proposition now as earlier. it has hit a wall now and does not make sense investing so much in a car when you have so many other choices. Earlier one could get a fully loaded full sized sedan for a million rupees, which now get just a hatchback or a sub size cut sedan or boot attached hatchback.
Gone are those days with people having globlal exposure and knowing car rates and features across the globe.

6. Lacklustre attitude of Car Industry and Manufacturers, who used to get away easily by lobbying on policies, compliance and adherence earlier and could easily sell sub standard out dated models in India that too commanding a premium. Now they are not prepared for BSVI or electric revolution that is imminent and just a matter of time. I am sure many like me would be excited to buy an electric car with 500 km range within a budget if available.


7. On top of this everyone has a feeling for the next wave of electric vehicles coming sooner than planned, and I too believe in another couple of years we will have 300-500
kms range vehicle available in sub 10 lac ruppee segment with Maruti, Mahindras, Tata, Hyundai everyone actively working on it. Wagon R electric is planned for 2020 and so are many others.

8. Car industry ruled and how - people queuing up to buy on launches, paying premium to buy early, waiting months to get their desired models, now the times gone and so they are feeling the heat. This is reality and eye opener for them to innovate and compete in reality and come out stronger.

[ramzsys]

Originally Posted by CarJunki

Govt(s). have played their role of chief greed officer increasing taxes year after year.

At the time of introduction of GST, there was a uniform rate of GST prescribed at 43% (28 % GST +15 % cess) for specified sedans and SUVs, which was comparatively lower than the effective rate range from 46.6% to 55.3% during the erstwhile regime. The rates currently range between 43% (28 % GST +15 % cess) to 50% (28 % GST +22 % cess) depending on type of motor vehicles, instead of a uniform rate as notified earlier.

source


Thus prices went up proportional to the hike in ex-showroom prices. Remember, it's always 'buy now to avoid price increase from january' year after year.

It's another thing that the taxes collected didn't reflect in the infrastructure; it's like the country is in a permanent 'work in progress, go slow' mode- dug up roads forcing people to go for C(Pseudo)-SUVs.

[CarguyNish]

While the GST council will decide whether to reduce GST on Automobiles on September 20, some doubts which came to my mind are

1. With it being a revenue generator for Govt, many State government might oppose reduction

2. 28% Tax slab is categorized as Luxury Slab, with cars being a luxury, will government give it up and reduce the slabs to 18% & 5% they had proposed sometime back ?

My question is, isn't the manufacturer responsible for degrowth since cars have become much expensive, and that the GST is constant since it's introduction in July 2017.

Here is simple maths of the above one,

Car price - 1000000
GST at 28% - 280000
Cess at 17% - 170000
Total. - 1450000

Suppose the price is including GST, let's take new launch Kia Seltos.

Seltos GTX+ 1499000
GST at 28% - 289462
Cess at 27% - 175744

Actual Price - 1033794

So, the above 2 scenarios are the one we see in cars.

Now if the basic price is increased, the GST remains same since it's calculated on basic amount, but the total price shoots up. So, may I ask this, isn't the manufacturers responsible for this price hike leading to cars getting more expensive over the years.

If GST is reduced it won't help much I guess, since the slabs are applicable based on basic amount which the manufacturers decide at time of launch. Any Tax Practitioner may clarify this.

[dadu]

The taxes are killing the industry and consumers alike, that too after honest taxpayers TDS on salary.

We have to wait and watch on 20th Sep when the next GST council sits and deliberates on GST for Cars.

But agree, damage is already done!

[aniyo]

I really don't think reduction in GST will benefit the consumer.
1. State govt may be tempted to raise the road tax as their revenue will be hit. Else they will increase fuel cess while decreasing the tax rate.
2. Companies will not pass on full benefit to consumers.
3. Over the period of next one year the car prices will increase again and will offset much of the GST reduction benefit.

I am convinced this government is all about propoganda and silently helping the corny capitalist. We are the biggest sufferers as salaried class

[dadu]

Originally Posted by aniyo

I really don't think reduction in GST will benefit the consumer.

2. Companies will not pass on full benefit to consumers.

I am convinced this government is all about propoganda and silently helping the corny capitalist. We are the biggest sufferers as salaried class

Companies have no control here as GST is levied on Sale.

[ramzsys]

Today's news says that this year there's 5.7 crore ITRs filed. Roughly 40 percent of it will be NIL returns usually. Thus there's about 3.5 crore direct tax payers.

Of the 137 crore heads, excluding children and those who live below 20k per month, is this all?

[aniyo]

Originally Posted by dadu

Companies have no control here as GST is levied on Sale.

See if the car price is 100 one would pay 131 for a small diesel car as per current structure.
If the GST is brought down to 18% and they continue with the cess, small car should be priced at 121 (GST 18 and cess 3).
I feel companies will price the cars such that the net benefit for the customer will not be 10 but less than that. It may vary as per segments I feel but for sure the whole benefit will not be provided to us.

[dadu]

Well as per todays news, industry is claiming a dip of 30% in PV sales and on top of that, Kerala finance minister has made a statement that they will oppose any GST cuts, since its reduces the state revenue also and govt should look at a fiscal revival instead.

[longhorn]

Unless prices go down, there is no way you are going to see an uptick in sales in the short to medium term. It is the combined greed of the govt as well as the auto makers that has led to this situation. Govt keeps hiking taxes both on the product as well as the fuel used to run it as though buying a car is a sin. Auto makers keep hiking prices every year without any tangible benefits to the customer. When you are asked to shell out 1 million bucks for a regular hatchback, customers must have had enough of the loot. It is the proverbial last straw that broke the camel's back.

The Kerala FM can mumble all he wants. What are these clowns doing with the 15 year road tax + GST + cess on GST + excise + VAT + kerala cess they are collecting. We have the narrowest roads in the country. Collecting taxes without building infrastructure will not get you far.