[spadival]

Its a classic demand Vs Supply situation...So the problem isn't just limited to automobiles or real estate. The biggest problem currently in India is that you'll find a buyer for almost anything that you can build/sell/steal .. such is the sheer size of the Indian "muddle" class and "richie rich" class. .i.e. manufacturers will always find some one who is willing to buy, regardless of the price or quality.

Originally Posted by raul

Take the instance of the real estate market, consumers which is us pay market prices for flats/apartments/houses, these prices are inline with international prices,

Yepp.. our real estate prices are inline with international prices... But as far as quality of the real estate is concerned, we are miles behind!!

[JUDA]

Originally Posted by ajmat

Why can’t cars be cheaper ?

We are being ripped off !!!!

Too expensive in India

Are these facts or myths ?

Well in the following spreadsheet, I compared UK prices vs Indian prices for near identical models – Pound is assumed to be Rs 78. I also did an analysis of the cars stripped of the tax component to see whether it is the manufacturer or the government ripping us off. Anything less than 0.85 is a rip off. Of course, there are discounts and minor spec changes that could affect the balance here and there.

How about including prices from rest of the world as well, Dubai , USA, Germany ? Prices of cars there are ridiculously lower than what we have here, also comparing the home grown markets. "Rip off" is being extremely polite

[extreme_torque]

I was on Volkswagen US site and kitted the Toureg with every conceivable options (luxury, offroad, utility) with the 5 Litre V10 diesel engine and the final price was 82XXX $! Approximately 35 lakhs.
Even the S class is 85XXX $... I understand the comparitively higher taxes here but manufacturers also save on labour costs and salaries which in my opinion is huge. For the cost of a single worker in US you can employ 10 people here.

[lurker]

I understand that Volkswagen Jetta is going to be introduced in India between price band of 5-9 lakhs. that might be Value For Money.

Another option for us Indians is to just stop buying cars made by rippers. But then who can prevent a wannabe sucker getting just one of those 'sanctioned' cars and standing out in a crowd.

[JUDA]

Originally Posted by GTO

Three reasons :

1. Taxes at varied levels.

2. Economies of scale - The Accord sells about 5,00,000 units p.a. in the States, while it sells about about 2,500 p.a. in India.

3. Localisation level : Many cars sold here yet have a significant import content.

GTO

HONDA accord in the US costs 18625$ X 41Rs = 7.6L Rs. So thats almost half as it costs here. The other half (100%)is attributed to the above 3 points you mean? No wonder they sell so many in the US. Ask the US citz to pay 40000$ for it and then we'd know how many sell.

[diabloo]

Hey lurker, what is that car that stands out in the crowd ???

Originally Posted by lurker

I understand that Volkswagen Jetta is going to be introduced in India between price band of 5-9 lakhs. that might be Value For Money.

Another option for us Indians is to just stop buying cars made by rippers. But then who can prevent a wannabe sucker getting just one of those 'sanctioned' cars and standing out in a crowd.

[JUDA]

When we are talking of over priced foreign company vehicles ! what about the Home grown vehicles - Safari DICOR, Scorpio do these use imported components to be priced (or taxed) that heavily cause an SUV like the Toyota 4Runner which is as big (size wise) and may have a much powerful 260BHP engine costs around 29000$ thats 11L Rs !!!? Are the Indian manufactures like Tata and M&M taking all the advantages by pricing their vehicles similar to their taxed counter parts and earning huge profits out of this? Considering their cost of labor, local parts, no import duties etc are considerably lower or nil than what the foreign companies have. Could some one answer this one please!

[Thad E Ginathom]

A long, concerted effort by media and consumers eventually persuaded the car industry to close the gap between British and European prices for the same car, but they made a killing in rip-off Britain for a long time.

Buyers with the energy and inclination (or a broker) could save substantial sums, even on a British-made car, and even ordering right-hand drive model by importing it from (mainland) Europe!

Is the Indian motor media at all interested in this? Or are they only interested in not upsetting the source of their advertising revenue?

[diabloo]

From Honda India site:
NHC iDSI GXi = Rs.7,27,000
Accord 2.4VTi = Rs.15,67,000

From Honda Malaysia site:
NHC iDSI = 77,272 ~ Rs 9,05,993
Accord 2.4VTi = 154,382 ~ Rs 18,10,123

From Honda Singapore site:
NHC iDSI = $56,000 ~ Rs 15,06,053
Accord 2.4VTi = $97,000 ~ 26,08,697

From Honda UK site:
NHC Jazz (hatchback) iDSI = $10,967 ~ Rs 9,02,991
Accord 2.4VTi = $22,327 ~ Rs 18,38,378

From Honda USA site:
NHC Fit (hatchback) VTEC = $13,950 ~ Rs 5,71,531
Accord 2.4VTi = $27,050 ~ Rs 11,08,238

What I want to say is compared to Accord, NHC is priced similarly in all markets. In all markets NHC is approximately 50% the price of Accord. In India, if Honda provides ABS & Airbags in NHC, it will still be 50% of Accord.

If you find Accord to be good VFM then you should accept that NHC is also good VFM.

Originally Posted by reignofchaos

NHC and Civic are easily the most overpriced cars in the Indian market bar all Skodas. The Skodas are priced at a level which makes me laugh. The next in line is the Verna CRDi, Getz Prime and the Corolla. I'm not including CBUs as almost all CBUs are overpriced.

The only Honda that is good value for money in India is the Accord.

[sathya_nars]

Originally Posted by diabloo

What I want to say is compared to Accord, NHC is priced similarly in all markets. In all markets NHC is approximately 50% the price of Accord. In India, if Honda provides ABS & Airbags in NHC, it will still be 50% of Accord.

If you find Accord to be good VFM then you should accept that NHC is also good VFM.

Lets compare fairly. When someone buys a car in India, he doesn't care if the car is 50%, 40%, etc priced from its next 1 or 2 level higher segment car from same manufacturer (NHC and Accord, examples here).

What he cares are: whether he gets necessary features/performance/etc for the price he pay for (with similar cars from other manufacturers) and while compared with foreign countries how much extra he pays for buying in India (this is something FYI, he doesn't have a control over it anyway).

Even though NHC is priced about 50% of Accord in various countries, do Indian version compare similar in features/spec with other countries? NO. So, it proves that NHC (and/or Accord, if you will ) is overpriced in India and hence Indians are ripped off!!!

Not sure how many more data points are needed to prove it !!

[lurker]

Originally Posted by Thad E Ginathom

A long, concerted effort by media and consumers eventually persuaded the car industry to close the gap between British and European prices for the same car, but they made a killing in rip-off Britain for a long time.

Buyers with the energy and inclination (or a broker) could save substantial sums, even on a British-made car, and even ordering right-hand drive model by importing it from (mainland) Europe!

Is the Indian motor media at all interested in this? Or are they only interested in not upsetting the source of their advertising revenue?

To show an example, we all know UK is the highest taxed country in Europe

From Skoda UK site:
Škoda UK - The New Octavia - Pricing

New Octavia 1.9 TDI PD 105 bhp is £13605 OTR which @ Rs 82.70/£
is Rs. 11,25,000

And Skoda Laura Elegance 105 bhp in India is 16 lakhs on road.

Obscene.

[vivekiny2k]

the problem is in the tax structure and indian mentality.

first, indians don't like to pay taxes (now that you started the debate Vs other coutries, unwillingly I have to bring this angle). Govt brought PAN to curb tax evading, and 90% of transaction started falling thru form-XX (whetever, that you have to fill if you don't have a PAN).


in other words, at all times, we are busy finding out how to avoid taxes (read govt revenue).

what does govt do? it starts taxing the commodities that the black money will buy. cars being on the top of the list.

who gains from this? the local business who steals taxes, shows zero liability, saves crores, and pays 1-2 lakhs of tax on the cars.

who loses? working class, who pays taxes before time (TDS), in full, and still has to pay the tax on cars. somebody who buys a car worth 3 years of income has literally lost everything to the above said tax evaders.


well, at least govt is encouraging entrepreneurship.

[tsk1979]

I'm sorry vivek I do not agree with you.
Cars are expensive in India because of the high taxes. If we had same tax structure as the US for Automobiles, then cars here would cost about 15% more than US, which is justifiable due to economies of scale.
As for Govt Taxing cars because of tax evasion, its a load of bull.
Its just mismanagement by the govt.
Cars are viewed as a luxury item not a necessity, but if you look at the state of public transport, cars/bikes are something which are needed here.

After collecting so much road tax, look at the state of roads.
So its not mentality, its just the way the laws in India are structured. "To generate revenue and feed babus" nothing to do with mentality here.

Cars are just a small part of it all. Its not going to change in the next 5 years atleast, because aam admi does not buy cars.

[caliper]

Originally Posted by hawkeye

The answer is the money that goes to the Central Government of India (taxes, excise, import duties, etc).

Also, though on a different note, if you consider the amount you pay for car insurance in US/Canada over a period of few years, you'll probably land up paying more for your car than in India.

Many people do not think about this when they look at the car prices in US/Canada

I don't understand -- we have mandated insurance in India too. And it covers the owner, driver, and third party as well.

[vivekiny2k]

Originally Posted by tsk1979

I'm sorry vivek I do not agree with you.

well, there can be many underlying reasons why cars are taxed highly. If I could prove any one of them, we could actually start a legal proceeding .

unfortunately we can only speculate. But the point i am trying to make is that if rest of the population paid taxes as well as working class does, we will see better infrastructure. in other words, if we take away automobile taxes away too, govt will have more shortage of funds.

babus and mentality support each other. tax payers think tax is not going to be used properly, so take away my share. babus like to take their own share. hence lower revenues and lower income for them. again, i don't think if their salary was increased they will stop sucking our blood. it again boils down to mentality. even if one has crores, he will look for more areas to illegally gather more money. e.g. naval officers selling our secrets, politicians making scams ( do you think they do not have enough money to sustain a life style they deserve?), IAS, Babus, teenagers in flashy cars kidnapping friends for money, looting goods in times of unrest. Don't you think everybody wants just 200% more than they deserve?