[anandhsub]

I guess they are launched as introductory prices precisely for the reason that they can be hiked later, obviously based on the response.

However they definitely should announce and offer price protection to bookings made in the first week or so. With the customer protection laws that exist in India placing faith on a new model on the very first day is a huge deal.

Also for some the price rise might be just a bitter pill they would have to swallow, for others, especially those who might have booked the base or mid variants for budgetary reasons the price rise could be just enough to make it unaffordable and all the planning and excitement about getting a new car all come to nought.

[careind]

I am not very sure about the question of ethics involved, so I will play the devil’s advocate here.
It is more like lottery rather than early bird advantage. Not every one gets it , but a small percentage of those who subscribed get it.
It was not as if Kia got the advance bookings and then told there would be no price protection.
The customers clearly knew there would be no price protection when they booked, and they went ahead and booked.
The path Kia was going to take was Plainly visible when Kia spelt out there would be no price protection for the early birds.
For those small percentage of people who actually got it at introductory prices, they were the truly lucky ones in the lottery.
We should exercise the power of the customer and cancel the booking and get done with it.
Market, and marketing ( read sales) , is evolving!

[AnAntinspired]

While there are several ways to 'manage' disappointment' at a price raise, Kia's strategy with the Carens surely leaves the bitterest after taste that takes the brand far down South of my future considerations.
I booked a premium base 1.5 petrol on day one of bookings opening, and was told I'm 5th in que, surely not unreasonable to expect luck to favour in a month or two. My purposes didn't need any higher than the base model, intended purely as a dog mover, given I had other cars for other purposes.

Today, over 2 months later of being in the que, I realise the price rise is unavoidable to my allotment. This would have been perfectly fine had it been down to having missed out on luck. However, I realise luck had nothing to do with it. Kia has had no intention of even delivering ONE car at that price point it appears, as there is not a single one across the country that's come to light. A bit like getting stuck in a que for fuel before price rise, and realising the attendant waves you into a que but doesn't even start dispensing fuel to your que. And after 2 hours, past midnight, the new prices start though your que had only 4 cars ahead while others had over 70!
Being in advertising, I find my dilemma just desserts, as clients often push advertisers to publish fraudulent claims, as this mythical game changer at 8.99 was, and while it causes my garage not much angst to cancel my booking, I can't imagine the bullying this would seem, if this was an aspirational stretch to being an only car.

[karthikrao23]

It’s ethically wrong on the part of manufacturers to not offer price protection. The best thing would be wait for at least 6 months after launch, see for any niggles/issues with the car to be resolved, then buy.

[Mach_1590]

Kia looking at short-term gains here. When you're an international brand, having presence pan India and so high up on the ladder of ethics jungle, such tricks will hurt the business in long run. They may just get away this time or may be not, but this ugly and unhealthy exercise should be strictly dealt with. Market will answer appropriately to the "greed".

[ashutoshb]

I had booked an MG Astor Style (base) variant on Jan 6th, 2022.

The tentative delivery on their app is showing Q2 2023.

I was told that if I upgraded to a higher variant, I will get the car earlier. But, since, I was in no hurry, I stuck to the base variant. I was hoping that once the semiconductor situation improves, I might get it sooner.

But, MG's strategy looks simple. A bargain launch price for the base variant to attract customers, then use all possible means to convert the sales for the higher variants.

Now, my fear is, by the time I get the car, it might not remain a value for money car, as it originally was.

[heavyduty]

Originally Posted by ashis89

It is an open market where there isn't any "agreement" between the buyer and seller. Buyer has an expression of interest of buying a car and seller manufactures by 'gauging' the demand/supply for particular model/variant.

I appreciate how you ended that it's your opinion and I respect that but no other business is run like that. A trade must have some rules and boundations. These tactics may look fair to you when you consider the manufacturer and the buyer as equals in the market, but unfortunately, that is never the case. Yes the buyer can switch to other manufacturer for his car needs but when one fish is bad in the pond... You know the saying. If everyone starts to follow through this, the market will become opaque.

[MaheshY1]

I get the point in aggressive pricing at launch for occupying customer mind share and then bringing the pricing to more realistic levels to balance the demand and supply. What I don't understand is not providing price protection to early adopters. I have a strict no-early adoption policy for new products or products with critical new-gen technology. I don't want to be a paying beta tester. But, if someone is paying to be an early adopter of my new product, which probably still has some problems worth fixing, then I'll take better care of such customers than those buying in the second or third year. The first few batches of car buyers deserve the best customer service experience. They should get the car at whatever price they book. We all remember Mr. Tata's "a promise is a promise" statement. I wish all product companies had such ethics.

[ashis89]

Originally Posted by heavyduty

A trade must have some rules and boundations. These tactics may look fair to you when you consider the manufacturer and the buyer as equals in the market, but unfortunately, that is never the case.

Yes, rules and boundaries exist in all the trades. And they can differ from state to state. I can think of some variety of trades where the rules differ.

When I am buying a flat (under construction), I enter into an agreement where the price is final. But I also have to pay the money in advance, at fixed intervals (time bound or construction linked). I receive my flat much later while the builder is enjoying the interest on my money and I am paying the interest on it. In the meanwhile, if the raw material prices have soared or crashed, it will have nil impact on my buying price.

When I am buying jewellery or fuel, I pay the amount based on the gold/fuel price on the date of purchase. It doesn't matter if the seller has bought the stock earlier at a much different prices.

When I am buying vegetable/groceries, the price varies from place to place, time to time.

The price of a packet of Britannia Good Day 50gm pack remains same across the country.

but when one fish is bad in the pond... You know the saying. If everyone starts to follow through this, the market will become opaque.

That's the interesting part. Demand/supply and buyer/seller always come to balance the equation in one way or the other.

A seller can hike prices or quote unreasonable terms if there's a buyer ready to adhere to their demand. Model A can have unreasonably long waiting period, can come with very high insurance quotes and handling charges, etc. Model B would be running deep discounts and would be readily available. Model C would have minimal discounts and short waiting period. One has to choose what they want and what they can compromise.


You and me, we both can agree about the unfair pricing tactics employed by manufacturers. But manufacturers are happy to see 3.2L buyers thronging their showrooms to get new cars. When the numbers start falling, discounts would trickle in automatically.


PS: I have had very bad experiences when I was in market to buy a new car. I had documented in my ownership review thread.

[Annibaddh]

Off late I have started reducing my time spent looking at new cars and related news. This has come because I decided to hold on to my Vento 1.4L run 1.6Tdi for another 5 years. No matter what cost calculations I do, it just seems far better value. Several factors have helped this decision - this pricing play is one of them! There are several other merits in holding on -

1. 5 years should be sufficient time for Electrics - or at least hybrids to become more mainstream. As fun to drive and efficient diesels become rarer breeds this becomes even more important. So the idea is hopefully to wait for a good solid hybrid whenever one becomes available in the next 5 -years (perhaps the next gen / upgraded camry with just a bit more FTD element built in)

2. Sedans seem to be having a bit of a resurrection in some markets - Australia has seen some resurgence. I hope the trend catches on - maybe we will have some more options in a few years as newer players enter the market.

3. The current market for automobiles seem to have heated up beyond all logic. This bait and switch being a particularly poor way to get customers. I just don't want to participate in a near-fradulant market.

4. Can't just beat off a general sense of cars being not of such value anymore - incremental advantage over cars in the mid 2000s to early 2010s are largely electronic hocus-pocus. Things that count - genuine experiential change or build quality or just the way the cars feel on road, seem to have been compromised - for pricing that frankly feels just not worth it, no matter what inflation trackers on the forum may say even with all the merit their points have.

5. General availability of a good upgrade for my current car too (I love my Vento.)

[t2k4]

MG tried to honor the booking price with Hector launch and also awarded points that accumulated for every week the car wasn't delivered and those points could be redeemed for accessories or extended warranty, etc.

Mahindra tried to honor the launch price (for the first batch) for XUV 700 with the dealers following up multiple times to book the car even if the delivery date was uncertain to lock the 'launch price'.

The automobile industry in India isn't as regulated or monitored as in US, for instance. Post purchase experiences / issues with a new car are another demon if one has to deal with them (read Lemon law, or lack of).

I don't know if taxation is a part of this culture. Say, launch price of a car is INR 1 lac. The wait time is 6 months. In those 6 months, car price increases to 1.2 lacs.

Then, if the dealer were to bill at original 1 lac, it implies less GST for the federal & state government, and loss of delta revenue in road tax for state transport authority.

Not suggesting this is what motivates them to not honor the launch prices, not by a long shot, IMO. Car manufacturers and dealers couldn't care less for what the state makes or doesn't make as long as they get their asking price.

Another facet is the high taxation on cars in India. It's almost in the 'sin tax' category, especially for the luxury car brigade. But, the situation sucks for sub 4-meter cars & smaller cc vehicles.

Marketing teams use creative means to attract audiences - whether it's a 'launch price' concept or 'predatory price' concept, one way or the other, they get us (or somebody else; their competitor, for instance).

Only true competition can spur innovation and competitive pricing.

It' ironic that there's so much traffic on the roads, but the per capita car ownership in India is low because of the distribution of population across rural & urban India.

https://en.wikipedia.org/wiki/List_o...les_per_capita

US, with a population of about 325 million, has 270 million registered vehicles.

India, with a population of 1.3 billion, has a lot less.

Once competition matures further and people have more choices with customer protection norms, things will improve further. We're a lot better than when there were only Maruti 800, Fiat Premier Padmini and an Ambassador to choose from.

Car prices have sky-rocketed worldwide. A Honda Accord in US which could be had for USD 20K in 2015 is now past USD 30K (think of an Accord as a standard purchase like a Creta in US).

Circling back to the topic - from a consumer protection stand point, our regulators could do more to make the car manufacturers offer some protection on car price increases. It may not be as easy though since cost of manufacturing is influenced by dollar-rupee relation, semiconductor availability & fuel prices (cost of international freight, industrial lubes that are influenced by it).

[careind]

Originally Posted by t2k4

Circling back to the topic - from a consumer protection stand point, our regulators could do more to make the car manufacturers offer some protection on car price increases. It may not be as easy though since cost of manufacturing is influenced by dollar-rupee relation, semiconductor availability & fuel prices (cost of international freight, industrial lubes that are influenced by it).

I don't think government should get into the business of, well, business.

Customers have the ultimate power in their hands, but always think that others ( governments, regulators ) have to do it.

Even with this gimmick from Kia, If majority of the customers do not cancel their booking then wouldnt it mean that KIA gauged the market sentiment perfectly? the goal of any business is to make money.
If majority did cancel , then KIA learnt from it .

But as a market -
We let Toyota overprice us and get rewarded for it.
We let Honda believe that they could be a one product wonder in our market and it would be ok to cut down on their portfolios.
We let Skoda/VW into trying out the ostentatious pricing.

All of this just happened in progressive deltas and I think what KIA tried was an extrapolation of that curve.
How the curve goes, it is with how the market reacts.

But what I dont understand - KIA maintained there was no price protection from Day 1. So why are people who knew that fact and still went ahead and booked feel they have somehow been fooled???

PS: I absolutely dont have anything to do with KIA nor am I a KIA supporter. I was indeed about to book a CARENS, but backed out as soon as I heard there would be no price protection as it wouldn't let me plan my finances properly or take additional risks. And it was very imminent that a price raise was in the anvil.

[Ritkon]

Slightly off-topic maybe, but I would like to point out another aspect. The customers first in line for booking a brand new car are essentially guinea-pigs, knowing they have to deal with an immature product with lots of niggles. Manufacturers should essentially treat them with a bit more respect and the least they can do is to give them the car at the advertised price, knowing they essentially are helping the OEM to make a more robust product. Instead they are punished both ways by getting an inferior product at an out-of-budget price. Later customers at-least have the peace of mind of getting a niggle-free car at the same price as the first batch.
However, righteousness and short term profit making (read greediness) are not exactly bedfellows I guess.

[S.Shyam]

It seems unfair to force a change in the OEM's behavior with respect to pricing. At best, the effort must be limited to calling out this practice in public.

There is no contract in place, and there is nothing stopping us from buying/not buying after prices have risen. Unless there have been cases of dealers not giving the booking amount back if requested for, manufacturer should have the liberty to change pricing at will - with the obvious cost to their reputation.

[man_and_machine]

This is the price as a whole the Indian consumers are paying (not only in Auto but across different categories) for growing up as a nation. We have created a difficult market to enter and try out, hence offer lesser choices and consequently less competition.
That is because we want to grow both the industry and the market at the same time. Assume we were only interested in us being a market, with minimum duties and no restrictions on % on localisation for anyone to get a foot into the door. Then any brand would flood models from anywhere just to meet the market thirst.
That is tuned only to the market. But, that does not build the nation. We want to also graduate to a more balanced nation where we just don't want to be the consumer, but have a stake across the value chain. Have economic growth and stake in the ground too. For instance, there is (yet) no regulation on % participation on R&D for a product that is sold here. We are now aggressive, with contribution in the lower value chain a.k.a manufacturing. Maybe someday we will look at intellectual/knowledge contribution too.
This is not taking off topic, the source of this intro pricing and then predatory price raise is because once you make a mark, you can exploit it. The lack of alternatives is what drives this behaviour.
Getting the price right for launch is difficult but its not an unknown science. If there were 4 alternative to the Carens, and 3 more for Octavia this practise would naturally, via market forces be counter productive.
The consumers can shop around a little, but as a brand for products that hit some sweet spot, you can practise this behaviour now. The consumer will feel bad, be angry, maybe they will wait a little, but eventually convert.
Is the Fortuner selling any less now that it costs 44L+ for the same shell?