prashanthyr

Why are most cars in India expensive?

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I have been doing some research on the prices of various cars available in India, along with comparing their prices in the US and other markets and see that the price difference is huge. Contrary to our image as a 'Cheap' location, most of our cars are overpriced.

 

For ex: the Honda Fit, which is nothing but out City without a boot, with power everything, 6 airbags and AC starts at $14,000 in the US. On Road price will be around $15,000, which equates to 600,000. Considering that the Fit is imported to the US, whereas the City is made in India, isnt that expensive? I have only taken the Fit/City example (SX4, Verna too fall in to this category) since you could argue that most other cars like the Audis/Mercs/BMWs are mostly assembled here as opposed to manufactured.

 

The biggest thing i dont understand is how our magazines (Autocar included) talk of these as VFM.

 

Views?

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Yea agree with Gurkha , i think i created this Topic Already - WHy do we Pay More , think FRG should Merge this one with that , and there are quite a good answers too,

 

regards,

priya

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Well the Civic costs 9 lakhs for the V a/t varient and here it is 15lakhs .One morebad thing is that we do price discrimination in different regions especially the metro people suffer.

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this is not done a civic in  US market costs 15000$ and that + taxes comes to be not more that 8-8.5 lakhs in india it is not less that 12.5 lakhs , why is this are people in india such stupids to buy cars at a higher price , when the whole car is manufactured in india itself there is no problem with customs duty being to high ,and by the way every car manufacture saves nearly 8.5% extra on every car he sells in india from labour costs alone , as this being very less in india.

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its all about the money ...honey,well the major price differences are due to the high taxes across the board....from the spares to the finish product..i had read somewhere that the actual  cost of our cars sold are just around 60-65% their present rates...and actually chidambarams and yashwantsinhas and.....our tax planners want money to run the country and the best way is TAXsmiley19.gif

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yes. the main factor is economy, to be precise its the ratio of car owners to the total population of our country. if the ratio is high then govt levies more tax but if the ratio is less then govt can reduce the tax.

two points to note.... if the tax has to come down, the number of car buyers has to go high. if the car buyers has to go high then the infrastructure should support so many cars. bcoz all the bikes and ricks on our roads will have to be coverted to cars...

well simple truth is infrastructure is underlying cause for every failure of our country

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i think auto mags like ours...i mean ACI can come out with editorials regarding the price differences of various models sold here vis-a - vis other countries and let the larger population know what they are being charged for every penny

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Hi Members,

 

I'm new to this forum:  After reading through the various thoughts on why cars are expensive in India and cheaper in other countries, I'd like to mention that cars are not really expensive in India.  They are more or less the same with other countries.

 

The reason why cars seem cheaper in US or other countries is because the market in such countries also comprise of reconditioned cars, which is not found in India.

 

Reconditioned cars can be available at 25-30% of a brand-new car, which is why they appear cheap.  Ofcourse, not without a catch:  reconditioned cars, if not purchased from legimate dealers, buyers maybe conned, i.e. the dealers may service the cars with inferior spares, hide engine issues etc., and its parts like transmission that are easily shot after a few months of purchase.

 

on the good side, with a market for reconditioned cars, one can purchase an otherwise expensive car e.g. a mercedez, bmw etc., at about 500,000 - 1,000,000 rupees, whereas in reality this may be about 3-4 times higher, for a brand new car.

 

If we had a market for reconditioned cars, most Indians would be driving BMWs!!!

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Hi Members' date='

 

I'm new to this forum:  After reading through the various thoughts on why cars are expensive in India and cheaper in other countries, I'd like to mention that cars are not really expensive in India.  They are more or less the same with other countries.

 

The reason why cars seem cheaper in US or other countries is because the market in such countries also comprise of reconditioned cars, which is not found in India.

 

Reconditioned cars can be available at 25-30% of a brand-new car, which is why they appear cheap.  Ofcourse, not without a catch:  reconditioned cars, if not purchased from legimate dealers, buyers maybe conned, i.e. the dealers may service the cars with inferior spares, hide engine issues etc., and its parts like transmission that are easily shot after a few months of purchase.

 

on the good side, with a market for reconditioned cars, one can purchase an otherwise expensive car e.g. a mercedez, bmw etc., at about 500,000 - 1,000,000 rupees, whereas in reality this may be about 3-4 times higher, for a brand new car.

 

If we had a market for reconditioned cars, most Indians would be driving BMWs!!!
[/quote']

 

hey there! the real meaning for cars are expensive in India is that the same / app equal money paid outside India would fetch more features especially on safety front but not in India.

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Talking about taxes in our country these are very high (Customs (on imported parts)+ Central Excise+ State Sales Tax+ Octroi )). all remnants of the erstwhile bygone socialist era .I'll cite an example. Recently my friend who owns four Ambassador ISZ 1800 's and stays in the U.K. requested for some spares. I contacted the local Amby dealer and they were ready to ship the spares but said that the cost of these these will be at least 30% to 40 % cheaper, if  we contact Hindustan Motors directly at Kolkata. The price differential lied in the fact that while the local dealer pays the Central Excise and State Sales Tax and Octroi, all automobiles and auto spares/accessories are totally exempt from duties  when exported out of India. Hence directly getting spares exported from the company is obviously the cheaper option. It is for this reason that  many car makers talk about making our country as the base for manufacturing their cars for export. 

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its all about the money ...honey' date='well the major price differences are due to the high taxes across the board....from the spares to the finish product..i had read somewhere that the actual  cost of our cars sold are just around 60-65% their present rates...and actually chidambarams and yashwantsinhas and.....our tax planners want money to run the country and the best way is TAXsmiley19.gif[/quote']

where does tax come when everything is made in india cars like civic and city as even the raw material for this products are made in india ,if something is imported that is the design and i dont thing our govt taxes that....smiley2.gif

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well to maintain such a big country like india you need taxes..... specially when you look at such costly highways like the ganga highway project...... the project will be complete in 2-3yrs and cost 32,000 Crores thats

3,20,00,00,00,000!!!!!!!!!!....... hmmmm plus (not in india) but some countries put taxes as to control the number of cars.......

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Do we have any insider from one of the auto companies who can throw more light? As far as i can see, it looks more a case of 'How much premium is the public willing to pay for this' that determines the selling price of the car rather than anything else.

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ive heard that the new Tata Sumo Grande has speakers in the doors has anyone heard the does anyone know how they sound i am a music man and need good quality speakers does anyone know about any good SUV within the range of 6-7 lac i am not interested in secondhand vehicles

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ive heard that the new Tata Sumo Grande has speakers in the doors has anyone heard the does anyone know how they sound i am a music man and need good quality speakers does anyone know about any good SUV within the range of 6-7 lac i am not interested in secondhand vehicles

 

 i dont think this is the right thread to post your query.... there are other threads to discuss buying new cars and audio... hope you will find the correct ones to post this!

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its all about the money ...honey' date='well the major price differences are due to the high taxes across the board....from the spares to the finish product..i had read somewhere that the actual  cost of our cars sold are just around 60-65% their present rates...and actually chidambarams and yashwantsinhas and.....our tax planners want money to run the country and the best way is TAXsmiley19.gif[/quote']


where does tax come when everything is made in india cars like civic and city as even the raw material for this products are made in india ,if something is imported that is the design and i dont thing our govt taxes that....smiley2.gif

 

..made in india or elsewhere at every stage there are taxes involved..from the rawmaterial producer to the car manufacture..each component /part undergoes different tax structure(sales/vat/octoroi/gst....)thats where the taxes come my friend

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Normally am just a viewer in this forum. However for this topic i thought i had some views

As far as i know, there is not much of a tax difference between a locally manufactured car in a developed country or in India. And in fact the profitability margins for Japanese companies are much better in US even when the cars are manufactured in US itself than when manufactured in India and sold locally.

The reason the auto majors are queuing up in India is only because of the future potential so that they do not miss the boat and not for making immediate money. Of course it is a different issue when you manufacture here and export, when you take advantage of the low cost of manufacturing

The real reason is much more complex like purchase power parity, economies of scale - I read in some Auto mag that in the future car prices in India may come down to that of the developed countries, but by that time the a kg of tomato may cost Rs. 200

The question is are we ready for that? For example : Pay the same as what a New Yorker pays for parking? Just a thought...

Cheers

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