[Foxbat]

Originally Posted by GTO

Senior guy at a luxury car company tells me that the entry-level Germans are intentionally overpriced (e.g. GLA-Class for 40 lakhs OTR). Reason = not just profits, but they don't want a situation where every Tom, Dick & Harry has a small new Audi / BMW / Mercedes. They don't want the entry-level cars to become so cheap & common that it affects the brand cachet of the more expensive models.

Is that only for India and developing markets?

In Western markets Audi / BMW / Mercedes keep launching more small cars and SUVs which are cheaper and drive up the volumes. Are they not afraid that their cars are becoming cheap and common that it effects their brand cachet of their more expensive models?

For example in Germany S-Class is considered a luxury car while E-Class is commonly used as a Taxi and C-Class by many students or young professionals.

In US Mercedes sales have been increasing steadily over the last 10 years driven by sales of smaller and cheaper models.

[GutsyGibbon]

Originally Posted by shankar.balan

And in a direct answer to your question what does one get for the money? Lots more gizmos, electronic nannies, and auto everything.

There are some gizmos added, but I associate those to the general progression in tech adoption. The cost of camera sensors, chips and such would have actually fallen down in the last 15 years. They can use those savings to add more sensors and tech.

In my opinion, the increase in prices has to do with the depreciation of the rupee as well. USD was Rs 42 in 2007. That alone is a 85% increase. Even for cars entirely built in India, the global supply chain and raw materials imported, would mean that these exchange rates/depreciation has some impact on the price increase.

[vb-saan]

Originally Posted by GTO

They don't want the entry-level cars to become so cheap & common that it affects the brand cachet of the more expensive models.

That’s actually not a bad point to consider, especially in a market like ours where status symbols based on perceived luxury still plays a huge role. If it gets too common, the current targeted population of these brands will start looking a segment above.

Originally Posted by GTO

As an example, see what happened to Coach handbags which became a $200 item, selling mainly on discounts in outlet malls.

Tell me about it. Years back my wife used to adore Coach. One visit to an outlet mall changed it all

Originally Posted by Foxbat

Is that only for India and developing markets?

In Western markets Audi / BMW / Mercedes keep launching more small cars and SUVs which are cheaper and drive up the volumes. Are they not afraid that their cars are becoming cheap and common that it effects their brand cachet of their more expensive models?

For example in Germany S-Class is considered a luxury car while E-Class is commonly used as a Taxi and C-Class by many students or young professionals.

I would say it is quite market dependent and buying sentiments also. In the west you will a Mazda 3 being compared with an A-Class or the 1-series, which you won’t happening in this part of the world.

[stanjohn123]

Originally Posted by GTO

Senior guy at a luxury car company tells me that the entry-level Germans are intentionally overpriced (e.g. GLA-Class for 40 lakhs OTR). Reason = not just profits, but they don't want a situation where every Tom, Dick & Harry has a small new Audi / BMW / Mercedes. They don't want the entry-level cars to become so cheap & common that it affects the brand cachet of the more expensive models.

I don't think this logic makes sense because in India, car's costing above 25 Lakhs have very low sales. So even if luxury manufacturers priced their entry level sedan's sanely, volumes will still be less.

We are still a very value conscious market. So why are these manufacturers scaring away potential customers with these ridiculously high prices ?

[Jeroen]

Originally Posted by GTO

Senior guy at a luxury car company tells me that the entry-level Germans are intentionally overpriced (e.g. GLA-Class for 40 lakhs OTR). Reason = not just profits, but they don't want a situation where every Tom, Dick & Harry has a small new Audi / BMW / Mercedes. They don't want the entry-level cars to become so cheap & common that it affects the brand cachet of the more expensive models.

I think that could make a lot of sense. Good to see that they don’t focus in cranking out as many cars for as little a cost as possible.

The importance of what a brand stands for can not be underestimated.
In Europe 10-15 years ago we saw a lot of consolidation of dealerships. So for instance Audi, Volkswagen and Skoda became one and the same showroom and workshop.

During the last 5 years or so they have reverted that, especially for the higher end brands. So you buy your Audi in a dedicated Audi dealership, no VW or Skoda to be seen! The total number of dealerships has come down too, but what is left is far better equipped. Porsche for instance had dozens of dealerships and has reduced to about 8 across the Netherlands. But those 8 dealerships are real experience centres.

To revert to the Audi/VW example: When you go and buy your Euro 200.000 A8, you don’t want to have to fight your way through a showroom with a bunch of young families flapping about a Polo. No disrespect, but you expect a more elaborate process and experience buying an Audi A8 from a VW Polo.

To that point I always thought the decision of some of the A brands such as Mercedes, BMW and Audi to also enter into the small market segment was to some extent a bit risky. Enter using price premium of course. Makes sense.

At the end of the day I guess it is a very delicate balance between volume/price and maintaining brand awareness. Not easy.

Jeroen

[quickdraw]

Reviving this thread since I noticed that Porsche has hiked the price of the 718 by 50% from 85 lakhs. I have no clue why!

[AamodB]

Originally Posted by quickdraw

Reviving this thread since I noticed that Porsche has hiked the price of the 718 by 50% from 85 lakhs. I have no clue why!

Wow, I don't think there has ever been a single price increase of that magnitude since brands began selling cars in India.

It's even more strange considering none of the other models have had a price increase. Base Carrera is still 1.69Cr, Base Panamera is still 1.55Cr and the Base Cayenne is the same money as the 718 at 1.26Cr. The new Macan is imminent so price is missing.

[agambhandari]

Originally Posted by quickdraw

Reviving this thread since I noticed that Porsche has hiked the price of the 718 by 50% from 85 lakhs. I have no clue why!

Attachment 2199401

Yes, this is true. Sales executive also told me the same. I would think the reason for this would be that they are not importing these cars under the 40K USD price bracket which gave them a lower duty structure.

Earlier this was the reason for (somewhat) sensible pricing of the 718 and the cap on the number of options.

[Turbanator]

^^
Yes, Porsche HQ does not want to sell anything cheaper and in the whole of 2021, they have probably not delivered any 718 orders. Similarly, Turbo-S variants for Panamera and 911 could not be ordered, dealers will give different excuses.

I think this can be due to this

https://www.prnewswire.com/news-rele...301244796.html

I could not find any new cars listed with most Dealerships in Canada. Maybe everything is being held up at Halifax.

Looks, it's another variant of Diesel-gate.

[Whitebear]

Originally Posted by quickdraw

Reviving this thread since I noticed that Porsche has hiked the price of the 718 by 50% from 85 lakhs. I have no clue why!

Attachment 2199401

I was also shocked and couldn't believe when I first saw the steep price increase on Porsche's Website few weeks ago

https://www.team-bhp.com/forum/test-...-cayman-3.html (Driven: Porsche 718 Cayman)

Had to double check if I was looking at the correct 718 model or not