Re: The ridiculous price hikes of German luxury cars - Mercedes, BMW & Audi Quote:
Originally Posted by GKR9900 When you combine that with the following quotes, I can't help but feel fishy about the way the German pricing goes.
This after accounting for the cheap labor and material costs that a country like India offers. I can't really see a reason for this difference. Would be extremely grateful if someone can educate me on what I'm missing.
Precisely my point. If the inflated prices are solely because of the outrageous tax structure, how are Volvos able to price cars the way they do? |
How can any pricing be fishy in a competitive free market where the producer/trader is free to sell at whatever price suits him and the buyer is free to buy or refuse to buy at that price.
Please don't be under this mythical illusion of India being a low cost of production country. The business I own and run operates industrial services in 9 countries including 4 in the west and trust me after Dubai, India comes next in cost of infrastructure, electricity, water, land, licenses, fending off the inspector raj, etc All this thanks to the vested interests of our political class and sheer incompetence & shabby attitude of our bureaucracy. The only thing cheaper in India is the lower and middle spectrum of manpower - that's all. This is not some journalistic view this is what I see in my ledger each month.
How do you know or don't know if Volvo is practicing a market entry strategy. Booking a loss on a few thousand cars a year is well within their capacity to bear. I asked this question in November 2014 to one of the Volvo sales managers (of the company, not the dealer) and he actually said it is their strategy to price moderately in order to break into the market. Quote:
Originally Posted by Jeroen What lack of understanding? What's fishy? They can price their cars any which way they want. Its their decision/pricing strategy and your free choice to buy or not.
My wife buys cars and she hasn't got a clue as far as I'm concerned. She understands what she likes and doesn't.
I get this impression that some members are turned off because they believe these Germans are making a big profit here in India. Again, who am I to judge anybody else's criteria. |
Thank you for the balance and maturity Jeroen. Quote:
Originally Posted by thatsdileep Does this indicate that Manufacturers are making better margins with localisation than sharing the benefit with the customers? |
The manufacturers (like all other companies that produce goods and services) have many constituencies to address and share their operating profits, cash flow and productivity with - first and always first the shareholders ie the risk investors, then the creditors, after that the rest flow ie the employees and managerial leaders, the tax dept who in India re-interpret rules all the time to extract more tax today and let you fight to get it back 3 years later, the channel partners and of course importantly the customers. I would be very happy if the German trio and other car makers make healthy margins for then they will invest more, create more jobs and pay more taxes to the Govt. Quote:
Originally Posted by lurker Only a drop in sales, or lesser number of suckers generated per year (excuse me this but this is exactly how German trio see their customers). Their volumes are also kept knowingly low so that they can operate on higher profits with lower volumes at lower risk. Needlessly, for some reason they are operating at a small footprint, probably to pack bags and run or something at slightest provocation.
The Germans make great cars, but I also feel they have no business getting into our social milieu in this fashion.
Kindly check what German newspapers and Angela Merkel think/speak about India, check out any German news channel like DW or German rag and they think India is a filthy third-world poverty stricken urban litter. Check out how the German professor in some berlin/Leipzig university thinks about 'Indian men' (she thinks they all are rapists and decided not to enroll Indian male students in her class).Then why the hell should we be so accomodating about them, high time the competition commission cracks down on them. Granted though, that they make great cars. |
Esteemed Sir, I can only say these are sad comments coming from a Team BHP member. We cannot judge a nation and its 60 million citizens on the basis of odd comments by a few. I am sure we can find a dozen lousy comments by Indian persona against Germany or UK with ease. It does not mean 125 crore Indians are like that. I would be more willing to listen to your comments that are based on personal experience than regurgitating the tabloid press. If you have invested in Germany, done extensive business with them, lived in their country for some period of time, employed Germans then your views will be interesting to listen to. Sorry to emphasize this but we are here to discuss cars not vomit on a nationality.
By the way I personally chose not to buy an E class due to the lousy A.S.S. feedback from friends and instead bought a Volvo XC60. I am happy the German trio, along with other car makers, chose to invest in my country, create jobs and bring higher standards of automotive engineering to India. They have the right to price their products freely and we have the right to buy or not buy them (like I choose not to).
Last edited by V.Narayan : 29th August 2015 at 22:38.
Reason: additions
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