vivekbansal11

Why Cars sold in India expensive & poor quality

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I have seen lot of cars during my travel across the world and even spotted Maruti 800 in Mallorca (<?:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Spain) which has ASB, Airbags and other goodies. All the Car manufacturers sell cars in India at higher price and lower standards and inferior quality. E.g. Toyota Corolla as sold in US is around 14k-16K USD with the features are either available in Camry in India. Toyota Corolla in India is around 20kUSD or more. The interiors of corolla in US and India are very much different. Why do we pay more and get lower standard cars? Recently launch Linea is 1.3 -1.5 times expensive as in Europe and engine is also less powered in India. I am not sure why bodies like AAA and any consumer forum etc raise these concerns to automobile manufacturers or they are just bodies for name sake and manufacturers enjoy their free run and collect money.

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That's mainly because of the heavy taxes that manufacturers pay. I heard that they pay around 40% of car's price as taxes, not sure, i just heard from a friend.

And also the Indian buyers, we didn't expect much from them in the past, mainly due to lack of knowledge. But it is changing now. Makers are giving more features and quality is given importance too.

The third thing is government regulations. There aren't strict laws and regulations. If you see in US, it is mandatory to have 6 airbags. And a drivetrain should have a minimum 7 years warranty.

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There are 2 big factors responsible for this:

*High taxes by the Govt.

*Indian car market is still in its infancy, but growing fast. The aspirations of the Indian consumers are kind of met by the present breed of Cars/features/prices. As the market grows, consumers shall start demanding more for less, this will be the stage of Renaissance in the Indian auto scene. Tata with its Nano has already shown the direction & more will follow.

As we have witnessed, the Indian property bazaar has been through price correction, next could be the turn of Automobile sector!

The consumers have to demand more but the relevant lack of knowledge/education & fast buck, render them to make a beeline for what is on offer!

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Its more than just taxes.....

The car manufacturers trust the USA and UK more than INDIA. For example If they pitch a new car in UK, then they can save a lot in marketing cost.

UK and USA are two countries which are watched closely by people all around the world. They set the standards and others follow. Its been like that for long time, and many revolt against that but never win. Oh... forget that....

Coming back to topic.. If some car gets manufactured and released in UK, it get the attention of everyone. So manufacturers try to deliver the best of the best

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Who says that cars in India are of poor quality. The launch of Tata Nano has proved that India is capable of doing wonders and take over the fastest growing car industries of the world. Indian car market is one of the most promising and fastest growing market. There is nothing poor but yes the market is still in the development stage.

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its all because of the heavy taxation policy of the govt on cars...after these many years they still treat cars as a luxury item while its a necessity these daysz !!!

in europe abs+2 airbags are compulsory so even a maruti 800 was having these features.

in india car makers have to lighten the cars and hence they have average build cause we indians want fuel efficiency and thats why fiat suffered in india...their cars have excellent build but they are heavy and has a "drinking problem" !!!!

maybe europeans are rich and so thats why fuel efficiency is the last thing on their mind !!!!

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i dont know about taxes though but if i am not wrong car companys like hyundai has been exporting its cars from india and if taxes where high it whould  not be doing that and for what my klnowdege goes labour cost compared to countries like US,UK its is nearly half so they are making lots of money right,but still not passing that benifit to customers in india.governement should see in the matter and do something as companies like these are using our resources and man power and making money and exporting and still trying to LOOT us.

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they say its the tax structure but when everything is made here why will a civic cost nearly 50-60% more in india compared to US.they are not importing anything i guess, but still that heavy price tag

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Folks, you have missed out one other point. The Indian market is far more price sensitive than the US or western Europe. This means that cars have to be 'stripped down' to make the price points.

Also, volumes are not that high so a SKD/CKD route is often taken for all but the most basic cars, further increasing the taxation content. Furthermore, our roads (and till recently at lest) fuel quality also does not help.

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SG - Some of these 'stripped down' cars are actually cheaper outside of India. And whats the point of having higher taxes on cars coming in thru the CKD/SKD route.

Taxes alone are not going to make the manufacturers look at producing cars within India. They need to have higher volumes - which wouldn't happen unless the prices go down in the first place.

As long as the taxes are not rationalized, we won't see real competition in the car industry.

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I don't think Price is due to high tax alone. In 1990 the Maruti 800 sold at

Rs 2 lakhs and even  now almost same price. How come they are not affected by the increase in  steel price, operating cost etc.

I think they have huge profit margin.

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I am absolutely delighted to see this awakening amongst consumers in this country - and most of you in my opinion are quite right. Yes, we do pay about 40% in taxes for locally manufactured cars - but this does not explain why they are often 100% costlier than in other markets!

as for the Nano, I disagree that it is a quality car. it is a decent, LOW COST car. what does this tell us? that with the lower cost of labour in this country (as evidenced by Suzuki, Benz, Hyundai, VW et al setting up plants in India for export and local consumption), cars should be even cheaper here!

if mercedes can price its locally manufactured cars (made at Pimpri near Poona) at the same price as an equivalent, fully imported BMW (which attracts 125%+ tax), that's evidence enough that we're all being ripped off.

am not sure what the solution is, but I hope there will be a change. for my part, I refuse to buy cars that are not sold here with identical specs as anywhere else in the world. we pay more. we should get at least the very same.

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