[Lalvaz]

Originally Posted by Nithesh_M

You actually saved me a lot of time as I was typing the same thing. Why aren't people able to grasp the concept of inflation?
.

We do understand Inflation, thank you. You miss the point that car prices, like most other things are not only a function of input costs. Economics is a science which aims to extract maximum price from consumers, while appearing to deliver value. Unfortunately for some brands such as Skoda, their past track record is such that customers are scared of touching the brand with a barge pole and hence any price seems expensive plus the fact is that car prices in India have run up too far too soon.

[Chetan_Rao]

Originally Posted by Nithesh_M

.... Why aren't people able to grasp the concept of inflation?.

If the target demographic's earnings haven't kept pace with inflation, an inflation-adjusted price tag is still going to be un-affordable.

It's not just Skoda, to be fair, Honda is getting dangerously close to 20L with the City. That's insane for what the car is, inflation or not.

[vishy76]

Guys, I think inflation and it's Pros and cons along with posts pertaining solely to this topic can be discussed separately on another thread.

Coming to the Rapid, it doesn't really make any difference. Skoda was already pushing the manual variants with plenty of discounts in the first place. It's not at all surprising that they have slashed prices.

Volkswagen Skoda seem to have either overestimated demand or sales have fallen off a cliff. Looking at the fact that the latter has been a constant for the past 2 years , I think it's just misjudgment when it comes to production before BS-6 kicks in.

Anyone looking to buy a Rapid Manual or DSG will be in for a mouthwatering deal. It is surprising that automatic variants also have discounts due to the fact that demand wasn't that weak for them to start of with.

Secretly hoping the Vento 1.2 TSI DSG also gets a similar price slash or in terms of those who hate inflation, price correction

[shobhit.shri]

Originally Posted by Cresterk

10 lakhs inr is about 15k usd, try seeing what your options are for a new car in the US with that budget. Over here its enough to get you a car with a touchscreen, backup camera, steering controls, automatic climate control and a lot of other convenient features. Over there, you won't even get power windows for that budget on a new car.

for around 20K USD, that is ~15L INR, you can get a mid variant Honda Civic or base versions of Accord. They come with six airbags and all the basic things steering controls and backup camera. The same price 15L will get you a City.


What I am missing here? I don't know the reasons but cars are ridiculously expensive in India.

[aniyo]

Originally Posted by shobhit.shri

for around 20K USD, that is ~15L INR, you can get a mid variant Honda Civic or base versions of Accord. They come with six airbags and all the basic things steering controls and backup camera. The same price 15L will get you a City.


What I am missing here? I don't know the reasons but cars are ridiculously expensive in India.

For 24K USD my brother bought a turbo petrol CR-V, with exchange he got for 20K, he had a used Honda Fit (Jazz).

I was discussing the same with my colleagues in auto industry, taxes are not that big a problem, they are but not huge.
The biggest problem is our policies, manufacturing capabilities, Land reforms, workforce.

1. Policies:
There is nothing consistent in our policies. Companies are vary of investing in a market where the policies are fickle.
Our idea Make for India is non-sense. We are a low income country and not a big enough market to develop anything specific. Hence only Maruti has a India specific line-up. Asians in general buy car with similar mindset so there is some overlap in products across asian manufacturers. Europeans and Americans just can't build for India.
If our policies were inline with other countries like in China, the effort to establish Export and domestic production is easier for companies (Sub 4M rule, 1200CC for petrol and other such silly rules)

2. Manufacturing:
Our manufacturing is weak no 2 ways about it. We always have a minimum order quantity to start work. Chinese can do at a much smaller batch of work to a huge order as well. Almost everything across every quality is available in China. India does not have the depth or the spread of China. The reason other countries have lower taxes is they do not have mfg capabilities themselves and the population is not huge either. We can't afford lower taxes too much.

3. Land Reforms:
Its probably the biggest mess in our country. Difficult to get land, unreasonable delays, politics etc.
Secondly why would anyone start a SME mfg company when they can invest in land multiply the same in few years and re-invest. For our size and growth of economy our land rate increase by illogical rate.

4. Workforce:
Unions are there everywhere, India has just unruly political unions. Most politicians use this to extract money from companies.
Our skill level in general is not very high as most training center exist only on paper and there to provide only certificates.

Companies can work with a bit high taxes but it has to be stable which in our country is not the case

[AZT]

That is actually because of India's very high currency inflation. Your 14.64 lakhs in 2011 is equivalent to 23 lakhs today.


https://www.inflationtool.com/indian...amount=1464000


I know its hard to believe but cars made in India are actually very cheap compared to what you would find outside due to our government's lax and outdated standards which lets manufacturers skimp out on a lot of stuff. CBUs and luxury cars are an exception due to the very high taxes applied on them. 10 lakhs inr is about 15k usd, try seeing what your options are for a new car in the US with that budget. Over here its enough to get you a car with a touchscreen, backup camera, steering controls, automatic climate control and a lot of other convenient features. Over there, you won't even get power windows for that budget on a new car.

You are correct but this isn't an Apples to Apples comparison. Average annual income in India is approx 2000 USD and for Europe its approx 40000 USD (varies from country to country). But if you were to compare the price of a similar car say swift in INR, it is say around 6 lakh starting here, while it is 10 lakh (14000 USD) starting in Europe. We can do this for any car sold in India as well as abroad.



My point is even after skimping on quality and having different safety standards, the same car costs around 1.5 times in Europe but income there is 20 times that of India. I think this is also partly the reason for the slowdown, cars simply have kept getting expensive Y-o-Y without similar increase in income levels.

[Nithesh_M]

Originally Posted by Lalvaz

. You miss the point that car prices, like most other things are not only a function of input costs.

Hyundai cannot sell a new entry level car with one airbag this side of 5 lakhs today. I wonder why that is. Maybe its the fat profit margins and not the high input costs that's a result of most vendors and ancillaries shutting shops over last 2 years thanks to some stupid decisions by the all powerful.

Originally Posted by Chetan_Rao

It's not just Skoda, to be fair, Honda is getting dangerously close to 20L with the City. That's insane for what the car is, inflation or not.

Hyundai is getting close to 10 lakhs with an entry level car like the Santro. Compact sedans are already above 10 lakhs so why wouldn't an actual sedan go higher?
If manufacturers felt they could lower pricing to beat rivals they actually would prefer that rather than create huge surplus stock nobody can afford to buy and now has to be deep discounted creating losses for everyone.

Originally Posted by shobhit.shri

What I am missing here? I don't know the reasons but cars are ridiculously expensive in India.

A minimum wage earner flipping burgers at a joint earns nearly $1.8k every month.
He/she could save a year's salary and afford that $20k car.

Most unskilled Indians get paid $150 a month at best. They'd need 12 years to save up for that same $20k car.

See the problem? All fine and dandy comparing usd and inr pricing but the reality is that even at $20k in the US of A, a wide variety of buyers across income range can afford to own one without needing to sell their house for a loan.
Most mechanics in the US can afford a Mustang or a Camaro which is deemed a luxury vehicle here and taxed astronomically higher so only the rich can afford one.

[Reinhard]

Originally Posted by aniyo

Sub 4M rule, 1200CC for petrol and other such silly rules

Sorry for .

But what's wrong with this rule? This rule simply gives a "lower" tax slab for smaller cars. This was done to get more first time car buyers interested from the middle classes. This was to boost the car industry by being able to advertise "lower tax" that is being passed on as a benefit to the customer.

The rule isn't stopping any car maker from making cars that are longer or with larger engines. Some times these rules are in fact required to keep the auto industry actively involved in R&D.

For example - if the (really silly) ban on >2.0 diesel engines was not emposed, no auto maker would have made an investment to make better 2.0L diesels. Mahindra did it! Everyone was & is happy milking 15 year old 2.2 engines otherwise.

Even developed countries like Japan have such tax slab rules (Kei car segment). The taxation on higher end cars is high in all developed countries too.

The sub4m rule does not apply for export. Car makers are fully eligible to make whatever they want, ensure things are done by the books & export. Its for the car makers to come forward and invest first. Complaining about laws of the land (like Vodafone is doing for example) is an easy escape to hide that they aren't investing whats needed.

Talking of the volume segments - barring VAG - nobody else is bringing any modern vehicles from their main-land markets. Companies like Ford and Toyota are happy borrowing badges from other local car makers. Not all of this can be simply put on incorrect rules & laws.

Comparing with China isn't straight forward. There is a big difference in overall public mentality. Its not just politics. An average Indian is resistive to work as much as an average Chinese would work. The policies of the Chinese government are what they are - because they are sitting on virtually infinite pile of money which Indian / state governments don't have. And the Chinese policies have 0 regard for environmental concerns, which exist at least in a tiny portion in Indian policies.

Best comparison for now would be with BRS from BRICS. C is a bit too far up.

Originally Posted by Nithesh_M

Most mechanics in the US can afford a Mustang or a Camaro which is deemed a luxury vehicle here and taxed astronomically higher so only the rich can afford one.

The reason for that is a bit socialist actually. The (old & new) governments have tried to say "If you want to sell your premium cars here - setup a factory, make them here, create employment & then sell them". If you don't - we'll make it hard for you to sell them in large numbers by slapping high tax. VAG has to be given credit indeed for setting up assembly lines here in India for good premium cars.

[aniyo]

Originally Posted by Reinhard

Sorry for .

But what's wrong with this rule? This rule simply gives a "lower" tax slab for smaller cars. This was done to get more first time car buyers interested from the middle classes. This was to boost the car industry by being able to advertise "lower tax" that is being passed on as a benefit to the customer.

The rule isn't stopping any car maker from making cars that are longer or with larger engines. Some times these rules are in fact required to keep the auto industry actively involved in R&D.

I meant if they had studied and capped the petrol engine at 1500 CC range it would have been easier to localize as the same engine can be used across different ranges like in the case of diesel. The same 1500CC engines is used to power hatchback, CSUV, sedans etc. Also the 1500CC can be derived from a larger engine thereby extending the scope of the same design.

My point we cannot sustain the auto market by ourselves, we have small market. We should align with the global set up.

[Lalvaz]

Originally Posted by Nithesh_M

Hyundai cannot sell a new entry level car with one airbag this side of 5 lakhs today. I wonder why that is. Maybe its the fat profit margins and not the high input costs that's a result of most vendors and ancillaries shutting shops over last 2 years thanks to some stupid decisions by the all powerful.


Hyundai is getting close to 10 lakhs with an entry level car like the Santro. Compact sedans are already above 10 lakhs so why wouldn't an actual sedan go higher?

Santro @10 lacs. Seriously? The most expensive variant is priced at less than 6 lacs ex showroom.

[NST440]

Originally Posted by digitalnirvana

Sorry for being OT but couldn't resist replying

I joined at less than 2.5 L 13 years back. I'm still with the same organisation (can't / won't take names) so anyone's guess how much my current pay is! It's fair to say that any low-mid range car would be most of my annual salary. That's overwhelmingly depressing whichever way I look at it.

Don't think I'll be able to afford buying a new car outright in my lifetime.

There is no need to be disheartened IMHO and in this day and age of consumerism and materialism, satisfaction up to a great extent is a work of mind.I know many who own BMW's, Merc's and all the luxuries they can but are under immense stress, on medication and Long for a good night sleep.

Probably for many, the rate at which things (read cars, mobiles, laptops, clothes, travel, land etc.) have inflated is not in sync with the salary they get and it is absolutely ok. There is no competition and there has to be absolutely no reason to be depressed. Enjoy the small pleasures of life and buy a used as good as new car whenever you can if you still feel like, the germans take a major depreciation hit, benefit from it.

Remember, the best things in life aren't things

[vsrivatsa]

Originally Posted by Lalvaz

Santro @10 lacs. Seriously, please don't misquote just to prove a point. The most expensive variant is priced at less than 6 lacs ex showroom. Your post goes all over the place with fiction to buttress your point.

Looks like the OP is referring to the Grand i10 Nios which does come very close to 10L at 9.59L On Road Bangalore.

Originally Posted by NST440

Remember, the best things in life aren't things

Wow! Well Said

[PrasannaDhana]

Originally Posted by NST440

Remember, the best things in life aren't things

Absolutely!



This is the difference between the rich and middle class. The rich does not work for money. And understands the above quote very well. That is why we see rich people buying rather humble cars (comparing to their affordability quotient) while we, the middle class always want to buy the car that is at the very end of our affordability spectrum, sometimes, more expensive than what we could afford.

Moreover the rich stay rich because of the above reason. If we focus on our paycheck and what we could buy with it, we can never be satisfied nor be happy. Comparison is the chief of joy, sadly, our comparison predominantly involves pay packages, cars and houses. Neither of them matter anyways.

Quoting Gary Vaynerchuk "You think people will like you if you drive a BMW, you ****" . So many of us buy stuff not because we enjoy using them, but because we believe owning that stuff would change the perspective of others on who we are. It seldom works that way.

You can drive an alto and be content and lead a happy life, you can drive a Bentley, compare yourselves with someone richer and live a resentful bitter life. Choice is yours.
At the end of the day, things are just things, what matters most are the people, purpose and perspective in our life.

Sorry for OT: mods

[Nithesh_M]

Originally Posted by Lalvaz

Santro @10 lacs. Seriously? The most expensive variant is priced at less than 6 lacs ex showroom.

I was speaking OTR terms since the gentlemen I was replying to said the City is nearing 20 lakh rupees. The top end Santro is a touch over 7 lakhs while City is over 17 lakhs. Both prices OTR Bangalore. If the City can be approximated to 20 lakhs the Santro can also be rounded off to 10.

If he meant ex showroom then the city is nearly a Santros price away from 20 lakhs.

[Chetan_Rao]

Originally Posted by Nithesh_M

....
Hyundai is getting close to 10 lakhs with an entry level car like the Santro. Compact sedans are already above 10 lakhs so why wouldn't an actual sedan go higher?.

How is quoting more examples of inflated pricing refuting the argument that pricing has gone crazy as a whole?

The most expensive Santro variant is about 7L (for an entry level model with Eon discontinued), the most expensive City is about 18L and will probably breach 20 with the upcoming refresh.

The list of insanely priced cars is endless. The idea was to pick a representative sample from the same segment as the subject of the thread, not point at a specific brand or argue mathematics. And yes, it's more reasonable to round 18L off to 20 than 7 to 10. Ask customers with those budgets.

None of which matters to the point being made, neither car is worth the money being asked for. Personal opinion only, buyers obviously disagree.