[extreme_torque]

Originally Posted by avishar

As a measure of comparison, the sales figures of the German 3 in other markets in 2017.

Germany (Total sales 3.4 million;similar to India)

Mercedes : 326,188
Audi : 283,196
BMW : 261,864

China (Total sales 28 million)

Audi : 597,866
BMW : 594,388
Mercedes : 587,868

USA (Total sales 17.7 million)

Audi : 226,511
BMW : 352,790
Mercedes Benz : 337,246

Damn! The Chinese appetite for luxury cars is astonishing. Its incredible how far they have come in the last decade or so from a nascent market to world beating sales numbers. As a market, China is more valuable to luxury car makers than the big daddy USA and that is saying something.

In another news, Mercedes Benz sold more than 600,000 cars in China in 2017 alone. That is more than 50k cars a month, which is almost 4 years of Mercedes sales in India! BMW and Audi arent too far behind with more than 550,000 in sales for the year. How badly have we let ourselves down compared to China? India will always remain a country with potential.

[AlphaKilo]

Originally Posted by extreme_torque

...
How badly have we let ourselves down compared to China? India will always remain a country with potential.

Why should we judge ourselves by the sales numbers of premium cars? We have our priorities. The junta that can afford these cars can be classified as:

Nothing offensive, but, looking at the people buying these cars:

1. Returned NRI who wants to still remain in his NRI status
2. I can afford it and I am an enthusiast
3. I want a foreign brand, especially German
4. I am a new richie rich and buy only costly toys.
5. Netas, Business people, movie stars, sports personalities...
6. Etc.,

We are a very cost conscious market and for us spending 30 - 40 L INR on a car that can carry only 4 people and needs a lot maintenance is too much.

We are market where Skoda is considered a premium car! In Germany, its called as "Pampers bomber" --> mostly preferred by families that need a lot of space. It has no premium call whatsoever.

Moreover, what is the additional value these cars bring apart from being of premium quality interiors and technology? They are not as reliable as a Maruti/Toyota/Mahindra/Tatas. You will see this if you come to Coimbatore, where there are lot of rich (really really rich) business families come from but you see them in humble Camrys and accords or even Vernas. Our values are not on cars and we still consider them a depreciating asset whereas real-estates and gold is still where our investment goes.

[V.Narayan]

Many of you would have heard and read of various measures of inequality of incomes in an economy. One of them is the ratio of the incomes of the top 10% versus the bottom 10%. In India it is 8.6X; in China it is 21.6X. Given that China has a per capita income about 4+ times India's and an income skew two and a half times worse it is no surprise that the demand for luxury cars is so high.

[GTO]

Originally Posted by GTO

This just in from BMW:

The game of one-upmanship between these two never stops. Within less than 24 hours of BMW's press release, Mercedes drops a note:

Hi,

Greetings from Mercedes-Benz India!

We are happy to share Mercedes-Benz India’s best-ever half-yearly sales in its history in India. The Three Pointed Star continued its market leadership and delivered 8061 units in the January-June 2018 period, a healthy growth of 12.4%.

Some key highlights of the January-June 2018 sales performance are as following:

- Mercedes-Benz continues its market leadership with a significant margin

- Highest ever sales of 8061 units achieved in the January-June 2018 period

- 12.4% year-on-year growth (January-June 2017: 7171 units)

- The sedan portfolio continues to grow registering 15.2% growth in the Jan-June 2018 period

- The SUV portfolio of Mercedes-Benz grew by 15.9% in the Jan-June 2018 period

- The E-Class long wheelbase sedan continues to retain its success stories across market

[ajmat]

There is also the cultural aspect which might change soon in China.

In China, houses are rare, people buy apartments. People very rarely entertain friends at home hence no opportunitiy to show off a swanky home. I have been to a few chinese folks homes. They are spartan except for the gadgets.

So the next best way to show off - luxury cars, holidays where they feature in each picture, clothes!

[avira_tk]

Originally Posted by AlphaKilo

Why should we judge ourselves by the sales numbers of premium cars? We have our priorities. The junta that can afford these cars can be classified as:

Nothing offensive, but, looking at the people buying these cars:

1. Returned NRI who wants to still remain in his NRI status
2. I can afford it and I am an enthusiast
3. I want a foreign brand, especially German
4. I am a new richie rich and buy only costly toys.
5. Netas, Business people, movie stars, sports personalities...
6. Etc.,

We are a very cost conscious market and for us spending 30 - 40 L INR on a car that can carry only 4 people and needs a lot maintenance is too much.

We are market where Skoda is considered a premium car! In Germany, its called as "Pampers bomber" --> mostly preferred by families that need a lot of space. It has no premium call whatsoever.

Moreover, what is the additional value these cars bring apart from being of premium quality interiors and technology? They are not as reliable as a Maruti/Toyota/Mahindra/Tatas. You will see this if you come to Coimbatore, where there are lot of rich (really really rich) business families come from but you see them in humble Camrys and accords or even Vernas. Our values are not on cars and we still consider them a depreciating asset whereas real-estates and gold is still where our investment goes.

We should judge ourselves by these numbers because both our countries were nearly in the same league when it came to development in the early half of the last century. Then they decided, “black cat or white cat, whatever catches the mouse”, we decided to fatten the mouse by opening the FCI godowns and look where that got us.

No offence, but the buyers today include corporate employees, most of them have made it on their own. The categories of customers you listed was the scenario about 2 decades ago and probably still true outside metro areas, luckily the country has come a long way from that,unfortunately not as far as everyone hoped.

We're not cost conscious, but poor, our spending power is impressive only in PPP terms. Skoda is premium even in China, because customers value heritage and Germany is way ahead that you can't compare with our brand perception. Europeans have warmed up to Skoda in a big way, so much so that VW is the least profitable nameplate of the group.

Luxury cars bring technology - safety and convenience, both of which are lacking in the entry segment and in most mass market offerings. They also bring social status, which is the biggest driver of sales,easiest way to announce you've made it. Reliability doesn't matter when you have other cars in the garage.

Coimbatore had a great luxury car scene from the 80s itself, the market exploded in the last decade, plenty of college kids in posh cars. The industrialist old money crowd don't need fancy cars, they own the place and everyone knows them,what about the new money in textiles, retail and real estate? plenty of them own fancy cars. RCR is full of them, the reason that some don't own fancy cars is because income is still unaccounted. Real estate and gold are not productive investments, just a low risk way to park funds. Cars are never investments, whatever their segment, they are a convenience you should be able to afford with your income, not financed through your capital.

[AlphaKilo]

Originally Posted by avira_tk

...Cars are never investments, whatever their segment, they are a convenience you should be able to afford with your income, not financed through your capital.

I agree! But comparing us to China is futile for all the reason you have already mentioned. They have a different society mentality than to ours.

Except for the IT crowd that is now able to afford these cars, rest of my points are still true. I am restricting my brands to E, 5, 7, S or Range rover, Jaguar XF, XJ class vehicles.

Philosophy Alert: We have the mentality of judging ones success by the cars they own and not by what morality he/she has but then we are not here in TBHP to discuss morality rather cars

And if we take swiss as an example, although they earn so so so much more than several european big economies, they just don't like to show off their money. We are somewhat similar to that, we are quite sensitive what our surroundings think of us. We want to show off but at the same time we don't want to grab anyone's attention. (Aankh lag jayega beta!!) No matter what the world thinks or wants, we in general want to park our money safely and that is in real-estate and gold. The numbers speak for themselves.

[extreme_torque]

Originally Posted by AlphaKilo

I agree! But comparing us to China is futile for all the reason you have already mentioned. They have a different society mentality than to ours.

No they do not live in their cars mate forgoing a house for a luxury car.

Originally Posted by AlphaKilo

Except for the IT crowd that is now able to afford these cars, rest of my points are still true. I am restricting my brands to E, 5, 7, S or Range rover, Jaguar XF, XJ class vehicles.

The IT crowd or the middle class essentially is the class that cannot afford these cars but can only desire to have one, one day. Visit any company car park and tell me how many of them you see. The only guy I knew in my company who owned a Merc was not becuase of his salary but because his family was loaded.

Originally Posted by AlphaKilo

Philosophy Alert: We have the mentality of judging ones success by the cars they own and not by what morality he/she has but then we are not here in TBHP to discuss morality rather cars

We had five lynchings in the last week alone, we have most numbers of poor people in the world and India is one of the most corrupt country on the planet so I want to know what Morality is that you speak of. Yes success should not be judged by the car you own but being able to afford it first place would explain the distribution of wealth. A country of more than 1.3 billion and a sum total of 2.5k luxury cars are bought. Something must be really wrong.

Originally Posted by AlphaKilo

And if we take swiss as an example, although they earn so so so much more than several european big economies, they just don't like to show off their money. We are somewhat similar to that, we are quite sensitive what our surroundings think of us. We want to show off but at the same time we don't want to grab anyone's attention. (Aankh lag jayega beta!!) No matter what the world thinks or wants, we in general want to park our money safely and that is in real-estate and gold. The numbers speak for themselves.

A quick search on google said Mercedes sold 22k odd cars in Switzerland in 2015. Switzerland's population is less than half of Delhi. Your point was?

[GTO]

Volvo numbers just came in:

Volvo Cars announced a record 33% growth in volumes in Jan-June 2018 versus last year. The robust sales performance of 1242 units is spearheaded by the XC60 which contributed 25% of the total volume. Successful addition of S90 to local assembly, aggressive network expansion and exemplary brand engagement programs led to the best ever H1 sales performance for the company. The rest of the year looks even brighter with the launch of XC40.

[avishar]

Relax guys. There is no reason why we cannot compare our premium car sales figures with China's. It is a measure of economic growth and consumer spending after all. It is the same way with which we compare our annual car sales figures with their, the argument could be made that even a Maruti Alto is out of reach for 75 percent of our population.

But, the point is, we should not be beating ourselves over how many Mercs India can or cannot afford, but worry about the growth of our entire automotive industry as a whole. We need to aim for greater indigenization, research and development, value-addition, stronger and global home brands, and greater penetration of cars (and safer;thus more expensive cars) into our population.

We are still growing and we have a long way to go. One day Mercedes will also sell half a million cars in India, why worry? When I was born, annual car sales in India wasn't even 100,000. Today, Hyundai sells 125,000 Rs 15-lakh Cretas every year.

[AlphaKilo]

Originally Posted by extreme_torque

No they do not live in their cars mate forgoing a house for a luxury car.

Do you have any statistics on their house purchases vs. cars? I don't but judging by the fact that only big car brands running towards china it is evident that Chinese prefer cars as luxury item.

Originally Posted by extreme_torque

The IT crowd or the middle class essentially is the class that cannot afford these cars but can only desire to have one, one day. ...

We both are on the same side of the line.

Originally Posted by extreme_torque

...so I want to know what Morality is that you speak of. ... Something must be really wrong.

Morality: Inspite of lynching and everything else happening, are you not living honestly as much as you could? This is the morality I am talking about. About something being wrong, we all know that. No point in arguing about it.

Originally Posted by extreme_torque

A quick search on google said Mercedes sold 22k odd cars in Switzerland in 2015. Switzerland's population is less than half of Delhi. Your point was?

Point is: They don't show off their money by buying S-class or AMGs as much as chinese do.

[Brishti]

Originally Posted by AlphaKilo

We are market where Skoda is considered a premium car! In Germany, its called as "Pampers bomber" --> mostly preferred by families that need a lot of space. It has no premium call whatsoever................Rich (really really rich) business families come from but you see them in humble Camrys and accords or even Vernas.

When I visited Germany my pickup was done in a E Class via bettertaxi's "Business class" from the airport and I was dropped back in a Superb again via bettertaxi's "Business class" so at least for them were in a similar class.

I dont think German people view Audi's, BMW and Mercedes as some sort of a statement and neither are they a deal for them. As far as rich Indians are concerned I agree expensive cars are the last thing on the list. A big money fellow I know uses his Creta for almost everything including traveling from Delhi to all the way to Shimla but his A8L stays under the tarp for months on end.

[V.Narayan]

Originally Posted by extreme_torque

No they do not live in their cars mate forgoing a house for a luxury car.

Facts would help more than sarcasm. My observation after doing business with the Chinese supports the statements of Ajmat and AlphaKilo that the Chinese are frugal with their apartments and spend more on their cars in comparison to say Indians. The Japanese too are similar to the Chinese in this aspect. Quite possible your observation has been different. I assume you have deep experience doing business/assignments in China.

We had five lynchings in the last week alone, we have most numbers of poor people in the world and India is one of the most corrupt country on the planet so I want to know what Morality is that you speak of.

The lynchings are tragic as they would be in any country however your comment is as off-topic as it gets. AlphaKilo's use of the word morality is in a completely different context.

A country of more than 1.3 billion and a sum total of 2.5k luxury cars are bought. Something must be really wrong.

Not sure why any economy's success or worth should be decided by luxury cars per thousand population. By that score Qatar and Saudi Arabia are the greatest places on earth. How we measure a country's progress has to be linked to its current state of economic development. We have far more pressing priorities than luxury cars. Not sure where your 2.5k figure is coming from - per year, per month? As I said earlier facts put across clearly, without bile, help a discussion.

A quick search on google said Mercedes sold 22k odd cars in Switzerland in 2015. Switzerland's population is less than half of Delhi. Your point was?

AlphaKilo's point I can understand - the Swiss are a conservative culture. A Mercedes does not hold the same wow factor for the Swiss as it does in a developing country.That is understandable with their per capita income of US$ 80,591 - the highest in the world after Luxembourg as per IMF data. So comparing Switzerland with Delhi is a chalk and cheese discussion. The Swiss as a culture tend not to show off their wealth in the same way some other cultures may do.

I am pleased the sale of luxury cars in India is not as obvious as it could be and equally proud of the growth of our auto industry in leap and bounds at the mid and entry segments.

[extreme_torque]

Originally Posted by V.Narayan

Facts would help more than sarcasm. My observation after doing business with the Chinese supports the statements of Ajmat and AlphaKilo that the Chinese are frugal with their apartments and spend more on their cars in comparison to say Indians. The Japanese too are similar to the Chinese in this aspect. Quite possible your observation has been different. I assume you have deep experience doing business/assignments in China.

I was not sarcastic at all. When you say Chinese are frugal with their apartment spend, the question really is what kind of apartment can they get for the money they spent compared to how much you will have to spend to get same apartment in India. Our housing prices are completely driven by black money and that is visible in the rental yields vs the purchase price.

As a salaried individual in Delhi, I would not be able to afford even a decent apartment because I am already outpriced by the hoarders who keep their black money in real estate. Hand on heart and tell me if real estate in Delhi/NCR is not overpriced.

Originally Posted by V.Narayan

The lynchings are tragic as they would be in any country however your comment is as off-topic as it gets. AlphaKilo's use of the word morality is in a completely different context.

They are "tragic" and that is all you have say for it? It represents a complete lack of faith in police and judiciary (pillars of democracy) by masses and lack of care or regard for human life which is even more dangerous and tragic. I understand the context and why would it have anything to do with the affording a particlar car. You could be a crook in an Alto and a saint in a Mercedes.

Originally Posted by V.Narayan

Not sure why any economy's success or worth should be decided by luxury cars per thousand population. By that score Qatar and Saudi Arabia are the greatest places on earth.

I am dissappointed with your argument sir. Are we going to debate how happy they are?

Originally Posted by V.Narayan

How we measure a country's progress has to be linked to its current state of economic development.

Do you want to judge the economic prosperity based on GDP numbers alone or by how much difference has it made in the lives of ordinary people? A measure of economic properity that works for the people would be infrastrucure, social welfare, health and safety and education and investment in such. You see where I am going with it.

Also my argument is not to judge progress based on numbers of luxury cars sold, the argument is if they sell so many of luxury cars, surely their everyday rides are much better than what an average salaried bloke in India can buy and that is if he can afford one.

Originally Posted by V.Narayan

We have far more pressing priorities than luxury cars. Not sure where your 2.5k figure is coming from - per year, per month? As I said earlier facts put across clearly, without bile, help a discussion.

"We have far more pressing priority issues to deal with" - Tell me if you are hearing it for the first time. If we have not been able to tackle those priority issues in the last 70 years, are we going to look at ourselves and try and figure out where we went wrong or are going wrong or use the same excuse everytime a comparison with another country comes up.

Sorry if I was not clear - 2.5k for the german big three a month.

Originally Posted by V.Narayan

AlphaKilo's point I can understand - the Swiss are a conservative culture. A Mercedes does not hold the same wow factor for the Swiss as it does in a developing country.That is understandable with their per capita income of US$ 80,591 - the highest in the world after Luxembourg as per IMF data. So comparing Switzerland with Delhi is a chalk and cheese discussion. The Swiss as a culture tend not to show off their wealth in the same way some other cultures may do.

I did not bring Switzerland into the mix. It was his argument that Swiss do not buy as much luxury cars as Chinese since they are conservative and I brought some numbers up for one luxury manufacturer from 2015 for one year for that population! And that is with their excellent always on time public transport infrastructure because of which you may not need a car as much.

Originally Posted by V.Narayan

I am pleased the sale of luxury cars in India is not as obvious as it could be and equally proud of the growth of our auto industry in leap and bounds at the mid and entry segments.

To each one it own but to me we have far more potential than we have realised until now. Until we acknowledge that, we will be happy with the status quo.

[AlphaKilo]

Originally Posted by extreme_torque

They are "tragic" and that is all you have say for it? It represents a complete lack of faith in police and judiciary (pillars of democracy) by masses and lack of care or regard for human life which is even more dangerous and tragic.

Off-topic, let us stick to the topic.

Originally Posted by extreme_torque

I understand the context and why would it have anything to do with the affording a particlar car. You could be a crook in an Alto and a saint in a Mercedes.

+1. Well said.