[kushagra452]

Car dealerships have seen a drop in walk in customers. This is not surprising. Car prices in India have been increasing at a blistering pace. There are at least 2 (if not more) price hikes by OEMs in a calendar year. The steep increase in lending rates is also to blame. Won't be long before the humble Alto debuts for Rs. 1 million!

[Shreyans_Jain]

On the other hand, there are insane waiting periods, underhand premiums, mandatory insurance and accessories, no test drives and overall high handedness.

There was a time, not long back, when people would complain if the dealer would add handling or logistics charges. When was the last time we heard that? Now, it’s just take my money and give me the damned car. What gives?

[andafunda]

The slowdown in discretionary categories is catching up with auto as well. There was pent up demand and hence we didn't see a material slowdown till now, but as they say, winter is here.

In other discretionary categories (both private and public companies), demand is down by upto 30-50% in pockets affected by the global slowdown. Just see the OND 2022 quarter guidance by listed public companies in the consumer discretionary space - almost everyone missed their targets. Situation among private companies isn't any better.

Interest rate hikes, credit contraction (given what's happening globally) and silly pricing can hamper growth for the four wheeler industry. On a side note, this will help temper the smug attitude developed by brands and their dealerships alike over the last three years.

Ofcourse all of this excludes the luxury market that is on fire.

[Turbanator]

Waitlists are on a few recent launched models. On the fast-selling ones especially those are 2-3-Year-old models, demand must have tapered. Also, no one can escape the ongoing issues overseas from which we have remained unaffected for a long time.

As of now, not a major worry for most manufacturers as they can shift production to the demanding ones but if there are more job losses, it will spiral to other industries. Also, it's more of sentiments, we see colleagues or friends losing work and we subconsciously limit our expenses. Cars are still mostly a luxury purchase, most can manage without one.

[speedmiester]

This was bound to happen, this is a segment that witnessed tremendous growth post covid due to various factors. Personal mobility, hygiene, higher disposable income and others.

Along with new cars, the used car market has also grown and the prices quoted were ridiculous. Hope this brings in some sanity into the pricing of both new and used car markets.

Now the overall economy is on a cool down mode and Auto is one segment that will feel the effects. Interest rates have closer to 10% now even for home loans, that's an insane amount of interest for a depreciating asset. News of layoffs across sectors have also had a detrimental effect on car sales.

[sandeepmdas]

Originally Posted by Shreyans_Jain

On the other hand, there are insane waiting periods, underhand premiums, mandatory insurance and accessories, no test drives and overall high handedness.

Worst time to buy a car, period. The reception you get from many government offices are 10x better .

I am pretty sure the used car dealerships are getting a lot of those footfalls. That's where the business end is: you can actually test drive and buy a car of your choice. At least you'll get a warm welcome.

[Raghu M]

The real reason is the alarming trend of layoffs. I wouldn't be surprised if this year ends as the worst in the last 2 decades in terms of sales. There is a sense of fear among most of the employees and all these purchases will wait for at least the next year until things settle down.

[GTO]

If you see our sales charts, the OEMs are still churning out 3.3 - 3.4 lakh units a month which is massive! And a huge year-on-year jump:


If we witness a slowdown, it'll only be post-March as companies line up to purchase vehicles at the end of the financial year (depreciation benefits). Although, the incredible growth was unsustainable, keeping in mind global & financial sentiments.

A part of me is just happy to see some power coming back to the customer. When demand exceeds supply, it becomes a very anti-car owner market (high prices, long waiting periods, feature deletions, govts mull new taxes...). When supply is more than demand, we will see a reversal of all these negative situations.

[one-77]

After nearly two years of high demand that led to surge in prices, the trend is changing in China. Many cars are now available at half the price they sold at a couple of months ago, and discounts are available across the spectrum including the premium Germans and BEV makers like Tesla. The second hand market is also taking a beating as new cars now cost lesser than their used counterparts.

https://youtu.be/Ovy0FyP97Zs

The US too is witnessing a fall in demand owing to the high interest rates and threat of recession, and used car prices have fallen.

https://youtu.be/dnibKrRPT5g

Question is, can we expect a similar situation in India soon?
Our market too (both new and used) has been very skewed in favour of the dealers and manufacturers for nearly two years now. Can we expect a correction?

[flashgo]

The same thing has been lingering in my mind from the last few days. In India, i think the price is driven by taxes, input costs and mainly the electronics. in the best case, i think we can see reductions by about 3-4 % at the maximum. that too because of the chips being not scarce anymore. even with these exorbitant prices, the automakers are not rolling in money because of the fall in the volumes. also, my friend in Toyota tells me that the company actually makes peanuts on a new car sale. Fortuner for example fetches only 1lakh in profit. imagine what others must be earning selling the lesser priced cars!

prices aside, i am actually concerned by the sustainability of the industry on the whole. with the inflation and rising interest rates, the automotive industry will surely face some bad days in the short term. I hope this wont be a factor contributing to the recession.

[raptor_diwan]

This has already started to happen, as evidenced by the new article I came across today on Team-BHP - https://www.team-bhp.com/forum/india...customers.html (Car dealerships see a drop in enquiries and walk-in customers)

https://www.business-standard.com/ar...1900444_1.html

This topic is being actively discussed in those forums.

Regarding your question, it is unlikely that there will be a price correction in India due to the high taxation rates, and the fact that demand is so strong that people are willing to pay the prices. Even if they find a good deal, they are unlikely to hesitate in making the purchase. Therefore, in my opinion, a price correction in India should not be expected anytime soon.

[DCEite]

Originally Posted by raptor_diwan

Regarding your question, it is unlikely that there will be a price correction in India due to the high taxation rates, and the fact that demand is so strong that people are willing to pay the prices. Even if they find a good deal, they are unlikely to hesitate in making the purchase. Therefore, in my opinion, a price correction in India should not be expected anytime soon.

Regarding demand, my understanding is with the job cuts and recession looming over us, coupled with high inflation rates, the demand will go down. India is not a magic superpower that is immune to every downturn. What comes up like a bubble does get burst, sooner or later.

[FiFo_]

To all who say prices won’t go down in India and the Indian consumer is willing to pay any price, the same song was sung in Dalal street 6 months ago and we see where Nifty and BankNifty are today. It doesn’t take long for the tide to turn as far as sentiment and financial matters are concerned.

[Dieseltuned]

Today's TOI Mumbai edition has carried a clipping mentioning nearly 50% less registrations for vehicles on this Gudi Padwa day compared to last year. Not really sure whether this is an outlier OR the start of a downward trend.

https://timesofindia.indiatimes.com/...w/98840108.cms

May be not entirely due to new metro lines , but these 2 new metro lines in Mumbai (7 & 2A) will definetly be a contributing factor to people's car buying decisions especially in the western burbs of Mumbai. Within couple of months of opening the daily ridership on these 2 lines has already reached 1 Lakhs + per day. A sure shot example of how and why good public infra must not be ignored and must be priortised.

Regards
Diesel

[adityakommuru]

There are two things here,

1. Prices being slashed from the retail prices as of now which is very unlikely in my opinion as we aren't a market like china where new energy vehicles are gaining at an unimaginable pace throwing ICE vehicles out of contention coupling with the emission norms put in place
2. Price hikes being out of the equation from all manufacturers till the demand rises again laying low for the next coming months which should be the most they could come up with in the Indian market