[kushagra452]

The incessant increase in entry level car and bike prices have finally started to impact the sales. Car and bike prices in India have been on a tear for the better part of 18-24 months. OEMs have been hiking prices almost twice a year! Personally I am not surprised to see sales taking a hit. The humble Alto costs upwards of INR 5 Lakhs! IMO, at present, there is no value for money product offering in the passenger car market.

https://timesofindia.indiatimes.com/...4.cms?from=mdr

[DCEite]

Originally Posted by kushagra452

The incessant increase in entry level car and bike prices have finally started to impact the sales. Car and bike prices in India have been on a tear for the better part of 18-24 months. OEMs have been hiking prices almost twice a year! Personally I am not surprised to see sales taking a hit. The humble Alto costs upwards of INR 5 Lakhs! IMO, at present, there is no value for money product offering in the passenger car market.

https://timesofindia.indiatimes.com/...4.cms?from=mdr

An example of y-o-y increase is last year in May 2022, when I purchased the Ignis Zeta MT, it cost 6.47 ex showroom and today the prices have been increased by 50k for this particular variant (now 6.97 ex showroom Noida).

Moreover, discounts last year on the Ignis were generous, to the tune of 25-35k, now they are reduced to around 15-20k.

So net-net, an entry level hatchback is dearer by about 60k without any value addition (except for BS6 phase 2 norm changes to the engine).

This, coupled with the downturn , layoffs and economic uncertainty, the car sales across the segments is expected to be below par this year.

[theAutomaniac]

One simple answer- Small vehicles are no longer VFM!

This is something I've experienced since I am in the market for a new highway-friendly commuter motorcycle for a long time. Now when I look at the market price, a Raider 125 is costs more than a lakh and the basic Splendor costs almost 80k.

These inflated prices have made me come to a decision that my next motorcycle is either going to be a pre-owned 150-250cc bike or I'm going to go all guns blazing and bring home a new 250-350cc.

Same thing I believe might be happening with others because this sudden price inflation in last three years is crazy and nobody is used to it and hence as a last resort, only the ones who cannot maintain bigger vehicles are buying new small ones.

Rest those who don't want to spend high amounts on basic vehicles might either be going to the pre-owned market or buying bigger vehicles respectively, depending on the spending capacity!

[Mustang_Boss]

Covid has changed lives for many. This i could see everyday whereever i go.

On one hand, the lower middle class were impacted significantly. Their life savings were burned during the Covid Lockdowns and the downturn after ensured, their families net worth is negative.

On the other, The middle class, skilled labor class saw an increase in their purchasing power because of scarcity of resources in the market.

And to top it off, The Government has raised the prices of fuel considerably when the prices of Crude were normal. This was done in anticipation of higher crude prices, however this had a significant impact.

Both these factors pushed the
- Sales of expensive cars higher than cheaper cars.
- Cheaper outlets (Food/Auto/others) saw a decline in business, while the middle class serving outlets saw an increase in sales.

Overall, there is some growth in the economy, but most of the growth is coming from the middle class and the common man is seeing a decline in his spending.

These are just my observations based on different data points i see everyday. Feel free to correct me.

[Nilesh5417]

Governments stopped benchmarking currency against physical gold. When the debt went up due to bailouts to banks and covid support to economy, they just started printing money like paper. So figuratively, money is fast becoming just that - a piece of paper. Look at all those high debt-low GDP economies around the world going bust.

So yeah, poor keep getting even more poor and the wealth concentration in the hands of top 10% keeps ballooning. So no wonder entry level cars, bikes and everything is getting hit. Gotta get used to it now, doubt it's ever going to go back. Debt fuelled dreams are here to stay. Earning more and/or taking risks with your savings (equity over FD) is the way forward. Sadly, the bottom of the pyramid isn't going to be able to do that either.

[Joeboy]

With Maruti stopping production of Alto 800 the most affordable car available now is only Alto K10. But with price of the Alto K10 going upwards of 5 Lakhs it doesn't make sense for buyers to spend so much to buy an entry level car. Instead they may pay more and buy a next upper segment car like Wagon R. It wouldn't be a surprise to see sales of Alto and Spresso going down in the next few months. There is also a possibility that Maruti may stop production of Spresso as the sales has been very low in the last few months and it may even decrease further. In this context we may see a rise in pre owned entry level cars sales as it might be more affordable to buy for people on tight budget.

[gauravanekar]

One more reasoning:
Indians, especially the generation who are in the 20s right now are noticable taller and heavier compared to their parents' generation. May these Altos and Kwids are too small for the current buying Janta!

[DCEite]

Originally Posted by gauravanekar

One more reasoning:
Indians, especially the generation who are in the 20s right now are noticable taller and heavier compared to their parents' generation. May these Altos and Kwids are too small for the current buying Janta!

Heavier yes. Taller, umm not necessarily. Height is a factor of genetics, which can't be changed, but weight is a factor of many things, many of which were related to the Covid lockdowns, easy money in hand of youngsters and splurging on unhealthy fast foods, alcohol etc, and general disregard for physical activity levels and health consciousness.

[audioholic]

Lot of cars flooding the used car market available for less than the price of an entry level car like the Alto. In addition to this, lot of DL registered cars are now landing in used car dealerships of all other cities. They are selling decently maintained cars at very attractive prices. Hence, the customer base for an alto might as well switch to a sparingly used car which might be bigger, safer and with more features and even end up saving some money on it. This is supported by the word of mouth saying that runs around about buying a used car as your first car and abusing it to develop driving skills.

Hence, the user base of these cars is bound to decrease especially with the atrocious increase in prices done regularly.

[nanoguy]

Earlier for many families car was just an intra-city transport. Now, with better roads and to avoid crowded stations/airports, some are preferring to use their car. Cars like Alto won't work even for a 3 member family with luggage.
This is also a driving point for people to move towards bigger vehicles.

[Fire_Burner]

Originally Posted by DCEite

Heavier yes. Taller, umm not necessarily. Height is a factor of genetics, which can't be changed, but weight is a factor of many things, many of which were related to the Covid lockdowns, easy money in hand of youngsters and splurging on unhealthy fast foods, alcohol etc, and general disregard for physical activity levels and health consciousness.

This is what I used to think until recently, but our genetics only decide the potential maximum height we could achieve when a balanced diet is followed. This is why the average height of people in most third-world nations has been on the rise for the past few decades. There is a video by Vox which explains this in detail.

https://youtu.be/ZoLk6GUKzU0

But digging deeper into the matter, found out that the situation in India is quite opposite. The average height of Indians has been on a decline. There is an article by Scroll that goes deeper into the India situation.

https://amp.scroll.in/article/100646...on-the-decline

Sorry if this is too off-topic for the thread. I’m new to the forum.

[gauravanekar]

Originally Posted by DCEite

Heavier yes. Taller, umm not necessarily. Height is a factor of genetics, which can't be changed, but weight is a factor of many things, many of which were related to the Covid lockdowns, easy money in hand of youngsters and splurging on unhealthy fast foods, alcohol etc, and general disregard for physical activity levels and health consciousness.

Although data is not exactly clear, definitely there are reports which supports this claim https://m.timesofindia.com/india/ind...w/53691857.cms

Anecdotally, surely height is increasing. It may not be very much evident for the part of elite families from urban areas (as the nutrition has been better than average for 2 more generations). But for most families coming from poor rural households the height increase over 3 generations is mostly visible.

[Manoj2268]

Entry level motorcycle costs can be simply attributed to the increased complexity. Previously the engine was fed by the carb(which max costs 2k) but now there is cost of ECM(7-8k min), throttle body(3-4k), fuel injector(3ish), fuel pump(4-6k) in addition of cat con silencer (10k), emission control canister system (3-5k) that has lead to over 50-60 percent increase in prices.

Something that cost 33k in March 2017(bs3) now costs 65k ex showroom.

[KPR]

Indian car purchase mostly is driven by social status. Bigger means wealthy. Same society once used to measure health with big body weight. So I'm sure the tide will change back to smaller Kei kind of concept cars. It is a matter of one or two hit cars again in this segment.

[buzzy_boy]

I believe that the taxation policy is partly accountable. A 1 lakh Rupee GST on an entry level car is more likely to make it unaffordable to its target market due to lower disposable incomes, whereas a 20 lakh Rupee tax on a 60 lakh Rupee car is not likely to make it unaffordable to its audience due to higher disposable incomes.


I'm not debating whether the tax policy is right or wrong. This is just my theory.