Are Vehicles in India "Fairly" Priced?

[Akash1886]

Friends,

This is a very basic question that I have thought to ask. India has varied buyer profile for cars and 2 wheeler and there is a massive choice of brands and vehicles to choose from. The 1st thing that any buyer in India wants to know about the car/bike purchase is the price.

All other important aspects are asked after knowing the price. Many a times it happens that the buyer has fixed budget to buy a car/bike for family/commercial purpose but after listening to the price often the decision is either changed or delayed.

So, as all of us have gone through this, hence, I would like to know whether the vehicles in India are priced fairly or not.

The thread includes all types of vehicles that are present in India as on date. Please provide your valuable suggestions on the same and recommend any valuable insight that can further improve the pricing policy of vehicles in India.

Looking forward to a great discussion as always!

Regards

Akash

 

[khizz101]

In my opinion for the current standard or you can say quality of products the companies are overcharging for their products. If they improve the quality of products which they can very easily then the amount they are charging will be justified

 

[abhijit]

In the Indian market the manufacturers are clearly overcharging from the Indian customers

 

[Bump_that]

there are many factors responsible for increase in price like taxation , government policies , vat, etc i dont blame maufacturers solely for the prices at which cars are sold here.

 

[TSIVipul]

If the vehicle is a Toyota then it isn't. Others seem to be VFM for what you pay.

So my vote is 'yes' considering the fact that other manufacturers are pricing their products quite well.

 

[carholic]

After all if a manufacture has to survive in indian market they have to price there product correctly. Vat govt taxation and policy also play a key role in cars pricing.

I n past few years india has seen some cars priced astonishingly high and inspite of price cuts they were wash out in indian market.

If we assume cars are not fairly priced in india then we should look towards our neighbour country nepal were cars are easily priced 400 to 500 % high from indian prices due to taxation .

Please have a look over this link .
http://pricenepal.com/11-cars

 

[max_demon]

Prices in the entry level and and mid level segment is great in India, but in luxury segment its very unfairly priced compared to foreign counterparts.

 

[Jayess143]

Here in india, the products are surely overpriced and the quality part is also not great. The worst part is they are not considering and providing quality as a big thing for the indian customers and we are also habituated for that. Not providing value for our money.

 

[Akash1886]

After all if a manufacture has to survive in indian market they have to price there product correctly.

Absolutely buddy, but really they are more concerned for pricing their cars exclusively and not inclusively. A small yet significant thing in pricing is the logistic charge. If the manufacturer plays an important role in providing a particular price to its dealer for a specific model then why is it not bothered about slashing up the illegal logistic charge? This illegitimate charge plays a major factor in make or brake of the deal. I have seen myself that certain brands in the name of logistic charges are charging around INR 10,000 for a sedan whose price is 9 to 9.25 lacs on road.

In today's time the cheapest Indian car i.e Tata Nano seems to be exclusive for a certain majority due to their budget limitation.

The taxation is basically done on the price of the finished product. The cost incurred by manufacturer in creating one unit of a specific model + the profit magin = the actual factory price.

Now, when vehicle reaches to the dealer from say Bangalore, the taxation is carried out based on the factory value + VAT in dealer's state + Dealer's margin.

If the manufacturers are really eager and think by customer's perspective (they don't have any other choice because customer is the one who buys their product) then why don't they reduce dealer margin and their own profit margin which are abnormally high.

In past few years india has seen some cars priced astonishingly high and inspite of price cuts they were wash out in indian market.

Apart from quality issues, cars like Superb, Laura et al are some of them because not every person may afford to maintain or buy it in my opinion.

we should look towards our neighbour country nepal were cars are easily priced 400 to 500 % high from indian prices due to taxation .

Excellent and very genuine observation. Dear, The reason for this is mainly absence of local manufacturers in that country. Every car in Nepal is imported (even those that are manufactured locally in India). So, due to high custom duty and other taxes the same car that costs in India around 10 Lacs will cost around 18 Lacs in Nepal.

Regards

Akash

 

[quantized]

For most of the manufacturers, high end variants are certainly over priced.
How would you justify 1 Lakh + premium for ABS+Airbags otherwise

 

[TSIVipul]

For most of the manufacturers, high end variants are certainly over priced.
How would you justify 1 Lakh + premium for ABS+Airbags otherwise

Is that brand being talked of which puts a chit saying 'ABS' on every car it sells with ABS and their sales executives at times say "Sir, this car offers you the luxury of ABS too" ???

 

[Akash1886]

For most of the manufacturers, high end variants are certainly over priced.

Not only highest variants but vehicles like Swift VXI face-lift is a 5 Lac rupees car buddy but has no safety! So is charging of 5 lakh justified? Does Vxi's manufacturing cost appears higher than top variant for Maruti Suzuki?

How would you justify 1 Lakh + premium for ABS+Airbags otherwise

How should we justify: 5 Lakh - ABS - EBD - Airbags?

Regards

Akash

 

[vijay_968]

For entry level cars, the answer is a BIG YES. Proof? They contribute to the chunk of cars sold month after month.

From mid-level upwards, pricing is NOT fair as the Car Cos charge a premium for everything. Even the trusted Maruti is NOT playing it fair. Definitely the design/prototyping costs would have been amortised by now, especially for Cars introduced 2 years back. Why not pass on the amortisation benefit to the loyal and marketing-for-free customers (my Swift Vxi gives 18kpl in city driving, with AC always ON / It is so comfortable with 5 big people in my Maruti types) ? The otherday a friend narrated how horrified he felt when he temporarily drove his Father's Swift after switching it with his Linea. With the prevailing breaking issue in the Swift's Lxi & Vxi versions, what's preventing them from offering ABS at current pricing ? Maruti earlier decided NOT to pass on the benefit to Customer, when they brought the length of Dzire to under 4 meters. With their pricing becoming the Benchmark, other Manufacturers also follow the same attitude.

For cars in Rs. 13Lakhs to Rs. 20L range, the Customer willingly spends money, knowing very well that the car looses Rs. 1L when it comes out of the show-room. Buyers of cars priced Rs.20L and above know that they are paying for the Badge too. It's a sort of statement "I can afford this". These TWO types of car buyers care ONLY about Quality (not a minute extra sound inside the Cabin), Performance (how quickly can I shake of the nearby irritant), Comfort & Luxury (my family should feel like they are resting in the cosy Sofa at home), etc etc. It's akin to buying a house/flat in a GOOD locality by paying a few lacs more. It is like choosing between an iPhone6 and a Zenfone5 (my phone ); purely related to heart and fulfilling a DREAM (iPhone buyers). The Car Cos know this and go singing all the way to the bank.

I wonder what'll happen if a Xiaomi / OPO like thing happens in the world of Cars ? Then I might own a Beemer equivalent at the cost of a Verna. AND, I'll be writing a post telling how I got maximum mileage by restarting the Engine. Ringa ringa, ringa ringa, ringa ringa, ringaa ringaa re ...

 

[nick1188]

As per my opinion, I certainly feel the pricing is not fair enough considering the mid level cars and above. Also, the exclusivity of the safety features and not being available as an option for the buyer in lower variants of a model bemuses and doesn't project the right message.. It seems as though safety is not a necessity but a luxury, which IMO is very unfair. To add to that, these features come at a premium cost as an optional accessory even in the top variants. Many would argue regarding the cost to manufacturer, but then if they are available as option in top variants then why not in others too.. the buyer is paying for it anyways.
So, No, I don't really feel the Vehicles are fairly priced in our Indian market.

 

[gauthamns]

I feel that the Indian car market is competitive with many global as well as local brands competing for people's wallet. So I wouldn't say that pricing is not fair. Pricing seems fair as per local conditions.

Indian market is small compared to other global markets where economies of scale drive down overall costs. Add to that VAT & central government tax, import tax on parts & the complex laws(labor, land laws etc). Tata had to move the Nano plant to Gujarat. And that cost has to be born by the customer. The road conditions in India are pathetic making it hard for many to own a car making the overall market small which has to bear the fixed costs.

VW couldn't compete with Maruti on price so they are now planning to improve localization by manufacturing engines here. If the pricing wasn't fair, they would have simply decreased the price instead.

I once read a Toyota executive saying doing business in India is very complex and almost 50% of the price goes to taxes!! Even though we say Toyota charges too much, they still made loss in the previous financial year.

You can argue that the reason for losses is that they charge too much hence less number of customers but have to remember that the market is only so big, and charging less will not dramatically increase customers benefiting no one.

My 2 cents. Compared to advanced nations like USA, India benefits tremendously from the low cost of manufacturing due to cheaper labor. But Government still views cars as luxury and charges huge taxes negating the benefit. Government has to rationalize taxes, make it easy to do business and improve the infrastructure.