[jesal]

the country might not be protected from companies coming in, with india's stupid tax system they cant even be bothered. no company is living on india's sales. they have enough, they ignore india since they wont die without them. people go like how rich indians were before independence and blah blah what cars they had and in their egos they went and bought rolls royce and made them into dumpsters. all this was not needed then and not now. i want to know how many people really in their lives have not tried to save tax may it be anything. must have for sure. i fail to understand something that is to be sold for 20 bucks can be upped for rs. 25, if u tell them you shall complain then they have the ***** to say go and complain we are not scared. even car companies are no less here. yesterday in papers itself authorized skoda selling FAKE parts charging normal prices. i mean come on firstly the damn car was expensive to run and then this too. looks like the company itself cannot afford its own parts to stock so they stocking fake parts. to all those who say india will progress let me bring this vision out to u also, if india goes one step, the rest of the world goes 3. the math says it all.

[khanak]

Originally Posted by jesal

the country might not be protected from companies coming in, with india's stupid tax system they cant even be bothered. no company is living on india's sales.

The Indian market is very important for companies worldwide. Its a brand new market which has more and more disposable income and a lot of people arent sure where to put their money. It isnt saturated unlike the markets abroad and therefore it is very attractive to foreign companies. Why do you think every company from Hugo Boss to Walmart wants to be present in the Indian market?

[khanak]

Originally Posted by 1100D

Creating a gap between locally manufactured cars vs the imported ones are fine. But if you tax the locally manufactured car itself quite heavily, the pricing of the imported ones CBU/SKD/CKD (whatever) go insanely absurd.

Coming back to the topic, I agree that there is no point overly taxing locally made cars. But why does a Honda Civic cost so much more over here? How come Tata can make a competitvely price Indica and Maruti can make a competitvely priced Swift but Honda cant price their Civic low enough? Does it have a higher margin or lower localised content?

[1100D]

Originally Posted by khanak

Coming back to the topic, I agree that there is no point overly taxing locally made cars. But why does a Honda Civic cost so much more over here? How come Tata can make a competitvely price Indica and Maruti can make a competitvely priced Swift but Honda cant price their Civic low enough? Does it have a higher margin or lower localised content?

Maruti does not have a Civic competitor. Thats why I actually set Corolla as an example that its not just Honda but Toyota too.

However one pays more for the SX4 in India than people pay for the Civic in US. In comparison SX4 sport (in US its equipped with a 2.0 dohc motor) in US costs $14000 ~ 5.5 lakhs. What does that money fetch you from the Maruti stable? Where does the extra money that the 1.6 SX4 command in India go?

[FlyingSpur]

Originally Posted by khanak

Coming back to the topic, I agree that there is no point overly taxing locally made cars. But why does a Honda Civic cost so much more over here? How come Tata can make a competitvely price Indica and Maruti can make a competitvely priced Swift but Honda cant price their Civic low enough? Does it have a higher margin or lower localised content?

Both, actually. It really is quite annoying.

[aaggoswami]

the country might not be protected from companies coming in, with india's stupid tax system they cant even be bothered. no company is living on india's sales. they have enough, they ignore india since they wont die without them.

@jesal:
I think Indian market is very important for Suzuki, Hyundai and upto some extent Honda ( Honda and suzuki, for 4 and 2 wheelers ) from international scene.

From the indian market, Tata, Mahindra & Mahindra rely on Indian sales.

Yes but some of the most respectable names like BMW, Mercedes-Benz, Audi, Porsche, Lamborghini, Ferrari, the indian market is irrelevent.


We are still missing great handling cars like Peugeot 207 and other cars like 308, 407 from their stable. We are really missing manufacturers like FIAT ( bad becuase of After Sales & Service ), Peugeot, Renault, Citroen, VW. All of these companies are excellent for indian conditions. Peugeot 309 can still teach the modern cars a lessson or two about compromise between ride and handling. They make tough cars. And best of all, they have some of the most wonderful diesels ( in the world ) and they have them in 1.4-2.0 category that have more than abundace for our requirements.

Coming back to the topic, I agree that there is no point overly taxing locally made cars. But why does a Honda Civic cost so much more over here? How come Tata can make a competitvely price Indica and Maruti can make a competitvely priced Swift but Honda cant price their Civic low enough? Does it have a higher margin or lower localised content?

That is the main point here. Why charge excessively? Basically Civic is charging too much excessive.

Maruti does not have a Civic competitor. Thats why I actually set Corolla as an example that its not just Honda but Toyota too.

However one pays more for the SX4 in India than people pay for the Civic in US. In comparison SX4 sport (in US its equipped with a 2.0 dohc motor) in US costs $14000 ~ 5.5 lakhs. What does that money fetch you from the Maruti stable? Where does the extra money that the 1.6 SX4 command in India go?

You have ignored that generally the models sold in so called "Developed markets " have higher amount of safety equipment. I believe the extra amount goes to buy liscenes from FIAT or other car manufacturers to get diesel technology.

[ajay99]

speedzak,
I am sorry that I cant agree with your view on 'ROADS" and 'UPLIFTMENT' of the poor.What is seen nowadays is that wherever road development or New roads are planned the poor are "UPROOTED".I can quote several instances
,like that of Moolampally, Vallarpadam, etc where due to road development.,the poor have been rendered homeless!!.Also once a big road comes in the middle of an agricultural area, the farms and fields get converted into commercial structures. You can see this happening all
throughout Kerala.Kerala 's area in which food crops are cultivated,have come down to 1/3rd of what it was 30 years ago.As you may also know "FOOD
SECURITY " is a big issue in Kerala today. do you want the rest of the farmland to be converted into flats and shopping complexes. unfortunately humans cant eat cement , tarmac and steel!!
Also think of the environmental hazards indiscriminate construction of road network will cause(eg: EXPRESSWAY) .So the premise roads are good for the poor is convoluted. It is good mainly for the REAL ESTATE lobby and the Contractors and middle men.These guys have made life miserable for the common man esp in Kerala

[sbasak]

Peugeot 309 can still teach the modern cars a lessson or two about compromise between ride and handling.

But French auto manufacturers still need a semester course from their Japanese counterparts on reliability!

[1100D]

Originally Posted by aaggoswami

That is the main point here. Why charge excessively? Basically Civic is charging too much excessive.

Why Single out Honda here, I have given the example of Toyota as well as Maruti (SX4 2.0 being available for Rs 5.5 lakhs in US).

Lets understand the root cause of this price difference of corresponding cars (sometimes inferior) between a developed market and India.

[raul]

The automobile market is strange, inspite of competition we are not seeing the benefits. Take the mobile market, highly competitive and this reflects in the rates inspite of the alleged cartelization of GSM providers.

Yet for cars none of the advantages of operating in a relatively low cost economy are passed on, on the contrary we sometimes see 100% markup compared to developed countries where the cost of business is huge, labour costs, marketing costs, basic business costs, regulation costs, environmental costs, safety costs etc. There is regulation here but implementation is lax. States usually compete to get auto industries to set up base in their states and give plenty of sops to companies to attract them.

Sometimes some posters make the 'volumes' argument, but it follows that if you overprice your product you won't get volumes, if Civic was $36000 instead of $18000 it would seriously affect its volumes in US. At $18000 its a half to a third of the average US workers annual salary. At 13 lakhs its at least one to two years wages for a similar profile Indian professional. You could make the point that the market is larger in US, but we have a relatively large and growing middle class who would definitely buy the civic at 7,20,000 rather than 1,300,000 so their pricing limits their volumes. Regarding taxes other countries have taxes too, maybe not as much as India but all the same it factors in the end cost.

In the end this is not as much the governments fault as the auto companies fault, maybe more awareness of the issue with the media taking the lead and some sort of independent regulatory mechanism can highlight these issues. But auto companies are big advertisers and the media in India though free have shown no appetite for hard hitting stories that could affect revenues, after all they are a business and owned by a few influential individuals who socialize with most of the industrialists and politicians. So that's a quagmire. Even in UK there is lot of sourness about higher costs than US and they they call it it rip off Britain.

But this topic has been on 'fire' since teambhp started operation, there must be a way to get to the bottom of it and figure out why the costs vary once and for all, either its taxes or its profiteering but let's find out and settle it. I am sure there must be members here who can give us an industry insider perspective.

[aaggoswami]

Originally Posted by sbasak

But French auto manufacturers still need a semester course from their Japanese counterparts on reliability!

Yes agree with you. One portion where both, Italian ( read FIAT passenger cars and upto some extent, Maseratti ) and French need more than semester course for realiablity.

Once in Overdrive, it was reported that in Maseratti that they were having a test drive, some electrical part didnt work properly.

Why Single out Honda here, I have given the example of Toyota as well as Maruti (SX4 2.0 being available for Rs 5.5 lakhs in US).

Lets understand the root cause of this price difference of corresponding cars (sometimes inferior) between a developed market and India.

A1100D
Honda is being pulled out because it is usually the one to charge much more than. May be its just a thought or an illusion, but we have 4 star NCAP civic competeing with 4 Star NCAP corolla and this is not the expected price. No not at all more than 10-10.5lakh On The Road.

And others also do this, but as honda is more famous, it is being attacked.
I would like to put it this way. There are many who would like to have Civic provided it costed around 2 lakh less OTR. So if some one is going in for City VTEC, he would like to extend more by one lakh and go in for Civic. Civic being targetted shows that the car is much loved. At least in this case.

[1100D]

Originally Posted by aaggoswami

A1100D
Honda is being pulled out because it is usually the one to charge much more than. May be its just a thought or an illusion, but we have 4 star NCAP civic competeing with 4 Star NCAP corolla and this is not the expected price. No not at all more than 10-10.5lakh On The Road.

And others also do this, but as honda is more famous, it is being attacked.
I would like to put it this way. There are many who would like to have Civic provided it costed around 2 lakh less OTR. So if some one is going in for City VTEC, he would like to extend more by one lakh and go in for Civic. Civic being targetted shows that the car is much loved. At least in this case.

Refer to my earlier post. Even for the latest Corolla (that has not hit indian shores), the price difference between Honda and similar products from other manufacturers are evident. So that differential is not unique to India alone. Why Honda prices its products higher than its competition and yet continues to make hay, is a topic of another discussion.

But Look at the Corolla in this example. Latest car (2009 MODEL) should cost 6.6 lakhs. How much do we pay for an older generation of the same car called Toyota Corolla.

Originally Posted by 1100D

Honda Civic EX retails in US at around $18000 corresponding to Rs 7,20,000 (@Rs40 TO $1)
Toyota Corolla LE (2009 model) retails at around $16500 corresponding to Rs 6,60,000

This is on the same lines that I had cited the SX4 example a few posts earlier.

Originally Posted by 1100D

Maruti does not have a Civic competitor. Thats why I actually set Corolla as an example that its not just Honda but Toyota too.

However one pays more for the SX4 in India than people pay for the Civic in US. In comparison SX4 sport (in US its equipped with a 2.0 dohc motor) in US costs $14000 ~ 5.5 lakhs. What does that money fetch you from the Maruti stable? Where does the extra money that the 1.6 SX4 command in India go?

You will find a trend/percentage by which the cars are pricier in India. Its not purely coincidence that all the manufacturers are charging a premium by that amount knowing fully well that the Indian market is price sensitive.

[GS-R]

Originally Posted by 1100D

You will find a trend/percentage by which the cars are pricier in India. Its not purely coincidence that all the manufacturers are charging a premium by that amount knowing fully well that the Indian market is price sensitive.

The total amount of taxes on indigenous cars is around 80-100% of the car manufacturing cost if you include the MODVAT/CENVAT, Excise, Road Tax etc. NO wonder these cars are around. I am not sure if the manufacturers are charging a premium (obviously there is the profit factor), but the taxes make the cars lot more expensive here than what you would expect to pay in the US for a similar model.

Perhaps if the domestic content of the parts increase in these cars, then it may be a different scenario w.r.t. pricing.

[aaggoswami]

Originally Posted by 1100D

Refer to my earlier post. Even for the latest Corolla (that has not hit indian shores), the price difference between Honda and similar products from other manufacturers are evident. So that differential is not unique to India alone. Why Honda prices its products higher than its competition and yet continues to make hay, is a topic of another discussion.

But Look at the Corolla in this example. Latest car (2009 MODEL) should cost 6.6 lakhs. How much do we pay for an older generation of the same car called Toyota Corolla.



This is on the same lines that I had cited the SX4 example a few posts earlier.



You will find a trend/percentage by which the cars are pricier in India. Its not purely coincidence that all the manufacturers are charging a premium by that amount knowing fully well that the Indian market is price sensitive.

Agree with you. No doubt about it. And I think a small amount of price difference also appears between Accord and Camry.
But I got your point.

[SLK]

Originally Posted by HentaiDesi

The total amount of taxes on indigenous cars is around 80-100% of the car manufacturing cost if you include the MODVAT/CENVAT, Excise, Road Tax etc.

80-100%???... MODVAT/CENVAT (is Excise) is 16.48%... Roadtax is not more than 4% (in Delhi). ... VAT/Sales tax might just be 4% or so.

add to that some double taxation due to local VATs say 10%....

roughly totals upto... 35+%.... whats the rest?

obviously there must be taxes in US too!!

And the pure cost of manufacturing in India has to be less than US!