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Old 10th September 2019, 14:26   #46
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

The on road price of an entry level CIVIC in USA is approximately 16L INR (23K USD). In india it is 21L, & that too comes with the 1.8L CVT instead instead of 2.0 CVT. In india the purchasing power of people is around 25% of Americans and yet cars cost significantly more. Do the math.

It all starts with the high taxes imposed by out govt. GST, Cess, Road tax etc. Then to make these cars somewhat affordable the manufacturers start removing the necessary features.in the end we get an overpriced car that does not even have the basic features.

1. We need to start with streamlining the road taxes across states.
2. We need to stop one time registration fee and limit it to a max of 5yrs. Re-registration should require extensive pollution and basic car health check.
3. 28% GST + cess is very high and definitely needs to be revised.
4. As most of the companies are probably gearing up for workforce reduction, why not pressurize for 40 hrs work week. Most of the automobile companies treat their employees terribly with long hrs a very low wages and during a down turn have no issues in letting them go. This is more true for the contractors.
5. Try to get the revenue from traffic violators instead of a person who buys a car and dives it once a week. Essentially reduces road tax, and catch every traffic violators, unlawful parkings, polluting vehicles etc.There are ways to make up for lost revenue. Do not punish the law abiding citizens with high tax.
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Old 10th September 2019, 14:47   #47
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

Even if the GOI is planning for a reduction in the GST it will not be for the < 10 Lakh segment since it's already low. And seeing that Maruti has had the highest decline we can safely assume that the bloodbath is happening at the < 10 Lakh segment.

Now why would Mr Bhargava want lower GST for seltos, creta and the others in that segment ?? Will that not make the sales of S-Cross, Brezza, Ciaz ( to some extent ) close to zero ??

I think this is not cyclical and we should respect the concept of what they call as invisible Hand in economics ! ( Definition - The unobservable market force that helps the demand and supply of goods in a free market to reach equilibrium automatically )

The days the OEM ( over inflated prices ) and banks ( financing everyone and anyone ) lived in a bubble are over. For those who are quoting the examples of Seltos and Hector please understand that those are new products and hence will sell, its better to gauge them as a company once they've settled down, say 6 months down the line.

If the trend of pricing a sub 4 meter AMT raised hatch back close to 1.5 Million continues, we will soon have our very own Let it rust moment ( source : https://www.team-bhp.com/forum/inter...er-prices.html (Let it rust: Social media campaign storms Egypt! Boycott new car purchases to force lower prices))

Sorry for the rant !

Last edited by aah78 : 10th September 2019 at 18:06. Reason: Names fixed.
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Old 10th September 2019, 14:50   #48
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

Amid the gloomy numbers, I notice Hyundai Kona sold 88 units. That's four times as many than in the previous two months. The Indian car buyer has been in a state of deprivation all these years.

Seltos, Hector, Venue & Kona are proof there are buyers for a tech-laden automobile. If only this insight dawned on our mass manufacturers. In the name of value engineering, they have churned out appliances on wheels and steadily increased prices blaming rising input costs.

I am reminded of an anecdote I heard from a person connected to the industry. This is about a spinoff Brand of an existing OEM. This new brand was to offer entry-level products at dirt cheap prices, ostensibly to challenge Maruti.

The overseas Product Planning team had planned to market the cars without a spare wheel, tyre jack, owner manual. These were to be sold as accessories to buyers. They were later added to the standard kit when dealers created a huge ruckus.

OEM's have for long taken car buyers for a ride. Literally. Now car buyers are shying away & the OEM's are pleading with the government for a bailout.

Last edited by laser2707 : 10th September 2019 at 15:19.
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Old 10th September 2019, 15:11   #49
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

Such is the sentiment amongst buyers that I was discussing this GST reduction with a group of co-workers when one of them chimed in that "Even if the govt. reduces GST, the manufacturers will increase the ex-showroom prices and so the car will end up at the same price".

While I was baffled and corrected the acquaintance I wonder how many customers think the same. Yes, (s)he was advocating buying a car irrespective of the GST reduction depending on one's need, but it does signal a mistrust, IMO.
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Old 10th September 2019, 15:29   #50
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

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Originally Posted by Hayek View Post
Are Ola and Uber still expanding fleets at the same rate? I suspect not - drivers are already under pressure,...... Assuming their fleet expansion dropped 75%, that in and of itself would account for an over 10% fall in auto sales.
That makes some sense. Another aspect to look at is the traffic & parking congestion in all cities. People who can move up from two-wheelers are hesitating. Inching through heavy traffic & finding parking spaces are big detractors for new drivers - particularly who want to learn after 30+ age. Hiring Ola & Uber are easier than hiring acting drivers for own cars.

It is said sales are now in 2008 level, which itself is still high. Old vehicles are not junked easily. How much new traffic our roads can handle?

Hope the auto industry will be forced to correct their high prices compared to US, EU while bringing the safety features on par.
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Old 10th September 2019, 15:31   #51
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

Looks like VW India is doing us a "favor" by sticking around, read on....

https://www.autocarindia.com/car-new...stay-vw-414092
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Old 10th September 2019, 15:33   #52
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

The market bloodbath was always coming. Over the years, an increasing number of my friends have shied away from upgrading vehicles - and some even from buying one - citing that (lack of) parking space , (overabundance of) traffic, (lack of) driving sense and (lack of) adherence to rules (by 2W, 3W specially) makes it nonsensical to have your own automobile in a city (Mumbai) that has Ola and Uber in increasing numbers. This is combined with the fact that buyers are getting smarter and the world is getting smaller and most can see that the vehicles we get are under-specced and exorbitantly priced. Forget the GST; a Skoda Superb in India costs (almost) as much as a (at nominal currency conversion) E-Class in the US.

https://www.mbzlongbeach.com/new/Mer...778ab4555d.htm

My business has a lot of auto-sector dependence, so I am seeing the impact of the slowdown (to some extent), but personally, despite this, I feel we'll be better off in the long-run if the ecosystem actually improved for everyone. (I could go on or pages on end on what I believe causes this - from ground-up, but that'd just bore the pants off everyone and this is not the forum for that, I reckon).
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Old 10th September 2019, 17:29   #53
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

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Originally Posted by ValarMorghulis View Post
"Even if the govt. reduces GST, the manufacturers will increase the ex-showroom prices and so the car will end up at the same price".
To be fair, when the govt. slashed GST rates on apartments, all the realtors bumped up their rates so the prices remained same. Greed is everywhere. I don't expect the auto industry to pass the GST benefit to consumers.
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Old 10th September 2019, 18:30   #54
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

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Originally Posted by oxyzen View Post
It all starts with the high taxes imposed by out govt. GST, Cess, Road tax etc....
..
Essentially reduces road tax, and catch every traffic violators, unlawful parkings, polluting vehicles etc.There are ways to make up for lost revenue. Do not punish the law abiding citizens with high tax.
The late Behram Dhabhar used to say, 'there is only one way to do things and it is the right way'.

Which means, the governments, if it had done it right, should have ensured that buying, owning and operating a motor car are fuss-free activities which would have kept the taxes coming for a long time.
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Old 10th September 2019, 18:59   #55
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Today's TOI carries an interview with RC Bhargava, the Maruti Chairman. He says due to new safety regulations such as mandatory air bags etc entry level cars have infact gone out of reach of the two wheeler rider who aspires to own a car. He seems to be suggesting that safety is for the rich and goes on to compare per capita incomes of other countries to assert that car buyers in rich nations can afford to buy cars with safety tech, in India new safety regulations have backfired by making cars unaffordable.

Makes sense, somewhat.
I think what he said is right. He is talking about lower middle class people who are trying to buy a car somehow to fulfill their dreams to own a one. For families like husband and wife carrying 1-2 kids with some luggage for company on two wheeler, anything which runs on 4 tires is way more safe than his existing two wheeler. Now Imagine same scenario in rainy season when roads are very slippery with mud and water on the roads. So for such people, car is not luxury but it's a utility, life saver. For others it is M-800, Omni or Alto, for them its nothing less than Mercedes or BMW.

Sad to see many people giving some really negative, weird & sarcastic comments for Mr. RC Bhargava's statement. I have traveled with my parents and my elder brother on a two wheeler in the childhood, that too in winter season with our school bags. So I truly know value of something which runs on 4 wheels, which saves you from rains or chilling wind for a lower middle class family.

Last edited by aniketi : 10th September 2019 at 19:10.
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Old 10th September 2019, 19:02   #56
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

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Originally Posted by aniketi View Post
I think what he said is right. He is talking about lower middle class people who are trying to buy a car somehow to fulfill their dreams to own a one. For families like husband and wife carrying 1-2 kids with some luggage for company on two wheeler, any car which runs on 4 tires is way more safe than his existing two wheeler. Now Imagine same scenario in rainy season when roads are very slippery with mud and water on the roads. So for such people, car is not luxury but it's a utility, life saver. For others it is M-800, Omni or Alto, for them its nothing less than Mercedes or BMW.
This strategy doesn't really work. The Nano which specifically was designed and marketed for this purpose failed badly.

In this age of EMIs, it's not that hard for a middle class family to shift from a 2 wheeler to a car financially, but with car prices touching unreasonable heights, many just don't want to. More than 5 lakhs on road for an A segment car? That just isn't worth it

Additionally, 2 wheelers are quicker in traffic and lighter on the pocket as well and that helps especially when we have a high amount of congestion and skyrocketing petrol costs

Last edited by porsche_guy : 10th September 2019 at 19:10.
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Old 10th September 2019, 19:35   #57
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

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This strategy doesn't really work. The Nano which specifically was designed and marketed for this purpose failed badly.

In this age of EMIs, it's not that hard for a middle class family to shift from a 2 wheeler to a car financially, but with car prices touching unreasonable heights, many just don't want to. More than 5 lakhs on road for an A segment car? That just isn't worth it

Additionally, 2 wheelers are quicker in traffic and lighter on the pocket as well and that helps especially when we have a high amount of congestion and skyrocketing petrol costs
Tata Nano failed due to various other reasons, else Alto which was costlier than Nano would have not sold around 25 K per month many times, right?

For many people even 1-2 K more per month also matters.

2 wheeler's are always quicker, but we are not discussing that here so no point in discussing it's pros & cons.
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Old 10th September 2019, 19:43   #58
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

Off all the players, Hyundai has weathered the storm somewhat by launching the Santro and Venue to a certain extent. The Grande i10 Neos due to the novelty factor of being new will help it a little too. MG and KIA needs to be seen post the 6 month period to see its actual performance.

Every other manufacturer is unable to cope with the trend. Huge discounts would be anticipated for the festive season. If the festive season does not move the stocks, nothing much will help until the economy picks up itself to the older levels.

A part of the problem is the greed of the manufacturers to price their products over the sustainable levels in the name of input costs.

Last edited by nkrishnap : 10th September 2019 at 19:44.
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Old 10th September 2019, 19:55   #59
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

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The on road price of an entry level CIVIC in USA is approximately 16L INR (23K USD). In india it is 21L, & that too comes with the 1.8L CVT instead instead of 2.0 CVT. In india the purchasing power of people is around 25% of Americans and yet cars cost significantly more. Do the math.

It all starts with the high taxes imposed by out govt. GST, Cess, Road tax etc. Then to make these cars somewhat affordable the manufacturers start removing the necessary features.in the end we get an overpriced car that does not even have the basic features.
I too used to compare car prices between India and USA. Now, I feel it is more realistic to compare prices + taxes between India and Western European countries or with a country like Singapore.

Road space is a premium in many of these countries. So, they tax the the automobile very high. Buying even a second hand car in a city like Stockholm is a very costly affair. Government purposefully does so to deter individual car ownership. European capitals are extensions of the old same cities and so roads could not be easily expanded for motor cars whereas, US and Canada was colonized later and so could probably build comparatively bigger roads from the beginning (may be for horse carts?).

Metro is well developed in cities like London, Stockholm, Paris, Budapest etc. Parking charges in the city center are very high. Similarly, car taxes are very high in Singapore and the car has to be scrapped in 10 years even if it was not run for a km.

With the huge population that India has coupled with the narrow roads (or lack of roads), we cannot go the North American way. There is no doubt about this point. It is that cars are aspirational and Government is also minting money, so the current setup may continue for some time. Soon, the reality will dawn and all parties will realize the futility of it. Doubtful? Please visit Bangalore on a week day and checkout yourself.

Electric cars can reduce the pollution but it too cannot solve the traffic congestion even a bit. Mass transport arrangements like metro is the only and only way ahead for Indian cities.

Last edited by B103 : 10th September 2019 at 19:58.
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Old 10th September 2019, 20:51   #60
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Default Re: August 2019 : Indian Car Sales Figures & Analysis

Finance Minister echoes the view shared here and it seems GST cut might not happen.
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