[Cresterk]

Originally Posted by GKR9900

Most probably his words were taken out of context, but if not, he might have been swayed by looking at a particular company's numbers. A company whose products seem to be lapped up by customers willing to part ways with their SIPs...Toyota! Just look at the number of bookings for the Hycross itself with prices expected north of Rs 35 Lakhs. Luxury manufacturers in India better realise that reliability is an important part of the equation too. Toyota is reaping the benefits of its legendary reliability tag in India, which it had carefully crafted over the years. Every now and then, I see friends/relatives/acquaintances, having sufficient budget, deciding to get the Fortuner instead of a luxury marque. For them, the allure of the T badge's reliability is more pulling than that of the three pointed star!

A simple way to deal with this would be to just increase prices by around 10L and then including a free 8 year 150k kms service and warranty package with every german car along with a complimentary car whenever it has to sit in the service center. I feel our fellow countrymen do not mind paying more initially just for bragging rights but they absolutely detest any kind of costs associated with service or repair.


Aka costly to buy = bragging rights
costly to own = despair and people mocking you for owning a 'badly engineered' product that needs too much upkeep.

[anandhsub]

IF you exclude those who run SIPs as part of their retirement savings, then you can probably count on one hand those who invest excess savings of 50K a month in SIPs.

If he really wanted to identify a market for Mercs, he would be better off looking at those investing in real estate.

[RRM]

Sadly, a poor and short-sighted CEO! It has become a fashion make statements by head honchos and then just move away and enjoy the discussion and limelight that it attracts. Being in sales, more attention is always a plus. It may backfire!

Felt like desperate to increase the sales? After the covid people have been careful in spending

He just made a passing statement, and our forum has already 2 pages of discussion. Imagine in other platforms!

Btw SIP has returns in longer term!

Seems he has very well accumulated retirement SIP, and kids might have settled outside India and no worries for future. At this position he has every allowance possible from Merc where his 75% salary will be his savings and in a matter of 2-3 yrs. next 15 yrs. will get covered.

[SoumenD]

We have a lot of Merc/Premium car owners on forum. Would be good to hear from them directly. Folks who bought 'New', did you ever bother about SIPs while buying these beauties?

Not considering folks who bought 'used' as the maximum depreciation hit is taken usually by the 1st owner.

[pqr]

"SIP" seems to be a typo. IMHO, what he means to say is "TIP" (Toyota Investment Plan).

So let me try to elaborate on how this scheme actually works: TIP has a few successful products under its umbrella, like Fortuner (diesel), Innova (diesel), Vellfire, etc. Now people invest in TIP, and after certain years of ownership, when a few of them are in the market to resell TIP products, they get good returns due to a lack of genuine depreciation.

Sample 1:
https://www.team-bhp.com/news/bought...ars-later-sell

Sample 2:



Market performance of TIP products

Toyota Fortuner FY 2021-22



The Toyota Fortuner, which is now priced between 32.5 and 50.4 lakhs, sells 40% more than all luxury SUVs combined.

Toyota Vellfire FY 2021-22



All imported Toyota Vellfires are priced ex-showroom at 94.5 lakhs. This strange comparison shows how well Vellfire is selling in comparison to the BMW X5, as well as the volume it is doing in comparison to the volume most luxurious large luxury sedans are doing together. Moreover, the V-Class has been removed from Mercedes’ Indian website now.

Disclaimer: The OP is neither an agent of TIP nor trying to sell TIP on TeamBHP. Please read the TIP offer document carefully before investing. It is a satire.

[anjan_c2007]

The quip by a top executive lacks a ground level connect and a basic understanding about the profiles of the SIP investors. Even someone either owning an Activa or a basic TVS XL 100 Heavy Duty or even the Hero Passion could be a SIP investor.

The buyers opting for high price tag, luxury cars may not be or rather not at all be affected owing to their SIP plans and savings outgos.

It's like some real estate biggie saying that his four or five bedroom luxury apartments are not selling owing to SIP investments by his buyers.

Or the Activa makers saying that Activas are not selling as buyers are preferring post office savings schemes and bank fixed deposits, that seem to be fetching higher interest rates.

[Pyrotek]

It's a bit rich of the Mercedes CEO to tell upper middle class+ prospects to buy a Mercedes instead of a compounding savings instrument. Perhaps if the CEO were to price his cars at sane levels (similar to how they do so in other developed markets), we may even harbour such thoughts. 70 lakhs for a C-Class or 55 lakhs for a wheezing petrol GLA makes me feel that Mercedes are already inflicting deep wounds on the aspirations of the burgeoning upper middle class. The comment he made does nothing but rub salt into those very wounds. He comes across as tone deaf and offensive, not intelligent.

This is a Mercedes, not a Rolls Royce or a Bentley. Who are they REALLY targeting for growth with their entry-level products? Even if a person earns 1 Cr+ a year, he/she will think twice before investing more than half their annual pay just to get a foot through the door of the Mercedes club.

[The Rationalist]

For a person to run a ₹50,000 SIP, the income should be at least ₹2,00,000/month. Will someone with a sane mind buy a luxury car with such an income? I very much doubt that. Even if one is ready to part with ₹50,000 a month, there’s hardly any luxury car out there that can be bought for that money, unless he can put a down payment of ₹25 lakhs! One would need an income of at least ₹5,00,000/month to consider a luxury car, even then one would be spending around an year’s income just for buying one! Imagine the kind of expenses one is going to incur on maintaining it. There would be people who spend a majority of their income on buying “dreams”, but most will regret the decision later.

He would be better if he can lobby the government to reduce the exorbitant taxes on cars. Without that no luxury car maker can see sales of more than 20,000 units/year in near future.

[ascension]

It was blown out of proportion, because there is only one line at the start where he mentions his logic behind this statement. He talked about the underlying reason why we even do these SIPs in India. Its because we don't have Social Security (fewer social security measures). I take this to mean that here, the individual is responsible for ensuring his/her sustenance in old-age as well as for the education and upbringing of his children, unlike Europe. If we did not need this, we would not need to save and hence we would be less hesitant to spend on such experiences and luxuries and not worry about the future as much.

[sgmuser]

Such a (financially) immature comment (if this is what he really meant) from a prestigious company and from the top brass. Surprised. a souped-up hatch like GLA cost 60 lakhs. with a right mind set, people should buy a Fortuner or a less costly X1. But still GLAs ply on the roads. So, it is not just financial calculations when it comes to luxury segment. To buy a luxury car like MB or BMW, one has to have lots of guts first, not just money. It took one year for me to make a final call to buy a BMW which is just worth 50% of my one year salary (I am a monthly earner). The hesitation is not about the cost of the car, but many other things that comes with it. Top 3 Germans are mostly bought by people who owns business (majority), not much by a monthly earning consumer, even though he can afford he will not buy it. There are many reasons like too much bling and attention, cost of owning/maintenance, future security of self and dependents, resale value etc. I know a friend who does business in crores still drives a humble Verna. MB never should try to be in every car porch in the street, I thought, that is for Toyota and Maruti. This guy should look up to the Govt to tax less to make his cars more affordable rather than asking people to empty their savings or suggesting them to rethink theirs savings/investments.

[ZenMaster]

Originally Posted by PrideRed

Are there more individuals who can afford a Merc? yes there are. Will they ever buy, may not be. Unlike other countries, usability is a major concern in India. While there are many individuals who invest in SIP than buying a merc, there are good number of people who can afford a Merc but cannot use it, because of inexistent road, lack of parking, poor after sales etc. On the flip side, things are changing, recall reading how young professionals are buying luxury cars which was unheard off say 10-15 years back!

And I am pretty sure that these people who can afford but don't buy Mercs are the ones who end up buying Fortuners at 50lakh.

Most of the people who buy the Fortuner Legender can afford Mercs. But they get twice the car. The fortuner makes up for the snob value of owning a Merc Badged car with its sheer towering presence on Indian roads and also the ability to go anywhere with the added advantage of reliability and peace of mind.

[KI07]

You don't make money or try to get rich to buy a Luxury Car only, there's a small number of these people and they are the ones paying these 50k for 7yr EMIs!

The rest have other goals!
-Bigger house
-Huge wedding budget
-International trips (which cost so so much!)
-Saving money to invest in the PETROLEUM INDEX FUND when it's out

[pms]

I think as a monthly earner, challenge on buying a car from the luxury segment is no job or social security in India, rising medical expenses with no clue on what could be a good corpus, expensive to maintain and really expensive to own a luxury car. Not that a monthly earner can't afford one, but chances are less unless there is a secondary income that will help sustain the lifestyle despite adverse situations.

[Mad Max]

From our "flat bed" thread, I always assumed that folks who bought a luxury car immediately started a SIP along with it to cope up with cray costs, delays and unforeseen expenditures. Maybe, he is referring to that?

He is just jealous that used Toyota Fortuners gives even certain financial products a run for the money. E.g. 2 year old used Fortuner is 40L. New one is 50L. Next year, 3 year old used Fortuner will be 38L (or even 40L - zero market depreciation). New one will be 55L.

Hey Merc, first, stick that damn spare wheel where it needs to be and then let's talk.

[GTO]

Originally Posted by Sahil

I would say, I am a victim of this and proudly so.
While I have always been quite balanced in my approach toward lifestyle and luxuries, I think there has been a renewed focus on investments over luxuries for me over the past few years.

Agreed, man. I have also started investing more & more, saving more & more and spending on lifestyle instead of just one more expensive car. Right now, we could get a Land Rover Defender or Wrangler home, but settled for the Thar turbo-petrol because it's an equal amount of fun. Happily using my 9-year old 530d and intend to for another 2 - 3 years.

Sure doesn't help that luxury cars are so insanely priced today (with few exceptions).

Of course, a big contributor is that I get my "car fix" from all the new launches that Team-BHP gets for test-drives & reviews. Driving 2 - 3 new launches every month is a lot more fun to me than living with the same 2-crore car.