[shankar.balan]

good logic in this post.
I would say that the Premium Brands ought not to price CKD/SKD in line with CBU - that's simply negating any possible benefits that we as consumers have a right to. Manufacturing/assembling the product here certainly drives the costs southwards so in the interests of encouraging more trials and better consumer buy-in and thus higher volume, the benefits thus gained need to be passed on to the consumers!
Perceived value pricing etc is all very well but I frankly see no reason why an Indian consumer needs to pay so much more for what is after all considerably less expensive in its country of origin/ manufacture. The whole duty structure is skewed and needs definitely to be revised in the near future.
This will automatically improve quality adherence standards and of course, dramatically cause indigenous manufacturers to pay attention to safety features etc, which at the moment they are a bit lackadaisical about.

Originally Posted by AirWind

Intersting thread!

The govt.'s so called labor protection imposes 139% customs duties on CBU imports which indirectly benefits the greedy premium brands to price CKD's near CBU levels. This lobbying must go in a free economy, imagine an entry level Merc or BMW to be priced at $30K?

The law of supply-demand doesnt work here (but does for a volume say a Maruti DDiS - high demand means high pricing thru premium), look at it practically - higher volume for a premium brand means meeting the required ECO and costs should go south.

[canonball]

shankar balan alas we have some thinking, intelligent and persevering minds out here. We all assume things will automatically change when the fact is any change in India has really happened in recent past due to some action from citizens until which time we are all sleeping elephants. So how do we get some momentum to this? It should end up in a long thread and campfire tales what can be done?

Shankar not only are they cheaper in contry of origin even places like Malaysia/Thailang/Indonesia they are substantailly cheaper. To add to it this segement is no concern of the masses and has no real impact the economy of the 2nd most populas country on the plannet. Look at China as a pricing model and they are communist if you go by standards applied by some folks out here!

[shankar.balan]

the point is appreciated. But you would have realized by now that we are in a sense, toothless paper tigers - unless some of us have a direct line in to the powers that be, I cant see these opinions making a difference in their thinking regardless of how many times we may voice them!

Originally Posted by canonball

shankar balan alas we have some thinking, intelligent and persevering minds out here. We all assume things will automatically change when the fact is any change in India has really happened in recent past due to some action from citizens until which time we are all sleeping elephants. So how do we get some momentum to this? It should end up in a long thread and campfire tales what can be done?

Shankar not only are they cheaper in contry of origin even places like Malaysia/Thailang/Indonesia they are substantailly cheaper. To add to it this segement is no concern of the masses and has no real impact the economy of the 2nd most populas country on the plannet. Look at China as a pricing model and they are communist if you go by standards applied by some folks out here!

[Jayabusa]

Thinking aloud, I can surely say that 2 reasons why vehicles are expensive in India in comparison to other Nations are:
1. Import substitution &
2. The ever increasing population of India in the era of globalisation.
I think it's a conscious effort to keep a check on the number of vehicles on the road with people having a high disposable income.

[serious_maniac]

Well as far as high import duties are concerned, Government is only incentivizing companies to set-up plants in India and create employment. It is the manufacturers who have to put more faith in the market and also manufacturing capability of Indian OEM suppliers. Demand-supply balance will come by itself in a few years (maybe a decade). Developed economies have taken decades to reach this, you have to give time to the Indian market as well.

The Government cannot control prices, profit making etc. It is each company's own wish how they want to price as long as people buy it. On a different topic, at least to bring the cost of maintenance lesser, the Government should put a cap on spares prices (cost of all parts for a car not to exceed 3 times the ex-showroom price of the car) - I believe that will make these cars affordable for many.

Till then let these marques be for the uber-rich.

~maniac

[shk_24]

People can some one throw some light on prices of these cars in other developing countries like Brazil, Russia etc. IMO it is unfair to compare the prices to the developed markets as the plants, equippments, machinery etc would have already depreciated there and hence manufacturer can afford to keep the prices low.

Prices in developing econimies ought to be higher due to low volumes and also to offset initial investment. Further the goverment may provide tax breaks for initial 10/15 years but then again during the initial period local sourcing is low and the manufacturer pays duty on imported components.
I think (and also hope) over a period of time as the market matures the prices should either come down or even these prices might start looking affordable compared to everything else (inflationary scenario)

[canonball]

Looks like the party is just about to begin. BMW 320D to be priced cheaper (mark down by 5 lacs) without Sunroof (is it really needed in India!), Mannual Seats (no more motor failier common issue in 3/5th year) etc. I think we have a price war on our hands sooner than we hoped.