Apologies for the long gap in replying as I got caught up with work.
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Originally Posted by Jeroen Would it be more/better value for money if they were selling the car at a loss? |
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Originally Posted by Jeroen
I asked before, would people be more inclined to buy, say a Mercedes, at its current price level if Mercedes was making a loss at each car?
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Of course not! In fact, my buying criteria is not based on how much profit/loss the manufacturer makes, but how much that product appeals to my perception of value and my priorities. For example, it's extremely hard for me to come to terms with the pricing of A3,CLA,GLA etc mostly because their performance is not that stellar. The same goes with choosing a 520d over a 320d. Cars which are way too similar in their underpinnings being priced over a million rupees apart with no significant changes rather than design and space!
On the contrary, there has been some exceptional offers from the Germans as well. Some years back, Audi had an S4 available in India. It was really well-priced. Heck! Even the 530d justifies it's price tag of around 80L with the performance and equipment on offer, so does the CLA45 AMG. Even the W222 S Class seems reasonably priced for
THAT segment IMO. But they have totally gone crazy with their pricing at the bottom end of the market.
If I were to choose between an A3 40 TFSI and an Octavia 1.8 TSI , I would always go with the Octy, even if I didn't have any budget constraints. Also the prospects of tuning the car later is a priority. Considering that the Skoda on-road comes to about 24L and the A3/CLA at around 40L,, it's hard for me to convince myself to pay almost 1.7 times that price just for a bit more quality and brand value. May be at 30L for the top end A3, I might have some confusion, but the current pricing strategy just doesn't cut it for me. In that sense, I may not be a prospective customer for that segment then.
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Originally Posted by prakhar1998 Could you please clarify as to how companies are taking advantage of customers? |
Continuing from where I left off above, I understand that there are customers whose buying criteria is entirely different from mine. There are customers who are more interested in brand image and the sense of accomplishment that comes along with owning an A3/CLA/GLA. They might be least bothered about power/torque figures or outright performance. It's just how their priorities are. These too add to the volumes. When there are enough takers, the company doesn't have anything to worry. They don't even have to revise their strategies. Why fix something that isn't broken, right? If the said products satisfied
my priorities, I would've gladly bought one. Unfortunately they don't and the wait still continues.
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Originally Posted by prakhar1998
Now coming to your price part. India has a 30% duty when it comes to CKD automobiles as opposed to a 2.5% duty companies like BMW have to pay to import their vehicles into USA. The 3 series isn't manufactured in USA. |
If so, BMW has started manufacturing the 3 in India now. And still, a made in India 3'er is expensive than a CKD US 3'er. From the discussions so far, what I have understood is that local manufacturing has been set here as a means to increase profit margins, and not to reduce the prices. While there's nothing apparently wrong with that, my love for these German brands would've grown several folds, had they spruced their models up with better performance and equipment, rather than just continue with bare basic ones.
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Originally Posted by V.Narayan 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. |
Thank you for throwing some meaningful insights into the discussion. If what you say is true, shouldn't the same be applicable to other manufacturers? I'm especially talking about the motorcycle manufacturers(KTM & HD) quickly expanding their foot hold in this country by pricing made in India products at par or below their global counterparts. Especially considering the fact that they're out right niche segments? (I believe Indians are yet to wake up to the idea of a 4 Lac rupee motocycle)
If anything, the A3/CLA should have been to the car market what the Street 750 had been to the motorcycle market.