[kaks15]

....The above-mentioned 3 cars are either fully imported or have high import content, and face the same taxes as the German luxury cars. It's extremely unnerving that, while their cars have seen a price increase of 15-25% over a decade, German luxury cars have become more expensive by 50-250% in a similar time frame.

Is it true? I always thought there is a distinction on the basis of engine size of cars even on imports

Saw some comparisons with price increase on locally manufactured car, not justified since import duties are a huge component with much higher price increase effect

I guess the strategy adopted by the germans is pricing the products at a point where it becomes an aspiration and then offer discounts to complete sales, sounds stupid but getting a 6-8 lakh discount on A4 is normal

Numbers are still minimal for India market 30-35k unit market with extreme competition, i guess they need pricing to justify profitability at the same time not let their brand positioning down by making it a mass brand

P.S. Don't bash me , I am not capitalist, just putting a point across

[prakhar1998]

I think ze three Germans have understood what we Indians prefer. We like to buy expensive stuff at a discount. So, say a car costs 40 lakh but has no discount, we probably will dismiss it for not being competition to the car that costs 55 lakh but has 10-15 lakh discount. On paper, the 40 lakh car might be better. But just because its not expensive enough, we feel its not worthy. Essentially, the prices for these cars haven't risen so much, its just the price on paper.

I don't know if the companies are able to derive any monetary benefits out of this strategy, but I think its basically decoding the Indian psychology. Its true. We go to expensive stores only at times of discounts. Its all the perceived price that gives us satisfaction. The psychology that the more expensive thing is better is very prevalent in India.

[vinaydas]

An interesting observation.

Traditionally for luxury car buyers (25 lacs + club), most buyers aim to jump up a segment. because of the rapid increase in prices, most buyers end up buying a newer generation of the same model or stick to a vehicle in the same price range.

Example: people who brought the fortuner for its introductory price at 18-19 lacs will mostly end up buying a newer 2016 fortuner at 30-35 lacs.
or a C class owner who brought his car for about 30ish will be able to afford only the C again at 50ish lacs.

[Speed Pujari]

Good observation. But while calculating the price hikes are we taking into consideration how much car got evolved by generation?

I think comparing the decade old C class with the one today is apple-orange comparison. They ARE different cars and not facelifted models.

But comparing years old 18 Lakhs Fortuner to the current 30 lakhs Fortuner is like apple-apple comparison. The upgrades can be hardly called as upgrades, they are mere face-lifting (except the current 4x4 AT).

Same with Honda city and other cars which has not seen much of a hike.

Ironically, after the price hikes the German luxos have lost the road attention due its increased population. There are not one or two, but five E classes in our street of like 20 houses. No one cares except the respective owners

[TorqueyTechie]

According to me this has got to do with below aspects.

1. Tax increase/Duty hikes that each government has put in on all imports/CBU which has taxed the company who pass it on to consumers.

See the below URL which says that there is 100% import duty on luxury vehicles.

http://www.dnaindia.com/money/report...ehicle-1805677

2. Amount of localization that other car makers have done to provide substantial cost cut to the consumers.

http://www.team-bhp.com/news/honda-a...ure-car-models

http://auto.ndtv.com/news/toyota-ind...exports-389952


So its basically means that more localization lesser price.

[Vid6639]

Compared to the big three Germans, VW/Skoda are on the other side of the spectrum which I must appreciate.

Looking at the Jetta, Octavia, Vento, Rapid the prices are not that much off vs what they were at launch. I remember you could get a top spec Laura L&K in 2009 for 22 odd lakhs and now the Octy is 2-3 lakhs more after 5 years.

Toyota on the other hand are going the BMW/Merc/Audi way. A Fortuner on launch was 22.1L on road bangalore for the 4WD in 2009 on launch. Within 6 years the price has increased by 10 lakhs with not much change to the car. The corolla Altis when I got it was 13.8L on road for the top GL spec. The new Altis is now 21lakhs for the top spec GL.

[blue_pulsar]

I think it would be worthwhile to check prices in the U.S. too. Typically more features, more safety would equate to more cost.

[acidkill]

Friends,

This hostile price increase is because from 2011, the rupee has depreciated by over 33% against the dollar.

Reasons for the depreciation are know to everyone.

Another factor - the govt has increased import duties consistently on imported cars. Even in this budget by another 10% i believe.

Comparisons with cars upto 25 lakh range are futile because these cars come into the CKD category. In the CKD there is some extent of localisation that negates the impact of the rupee.

Whereas for the more expensive cars in the CBU category, the taxes and prices are going up up and away!!!

Hence the overall impact.

But there is a silver lining. Assuming that Indians get wealthier over the next 5 to 10 years, we will see all these cars getting locally manufactured.

[vinya_jag]

I feel, these premium brands are toying with the Indian buyer mindset.
Their margins must be the highest in India, than anywhere else.

Over the last 10 years, how many Indians have gone into the crore earner bracket?
People have more money than ever before (Atleast in India). The inflation has been such.

That probably is not the case with any European or American countries, and these manufacturers might not have raised their bar so much in those countries.

Indeed, these cars have become more modern over those years, and have a lot of equipment than ever before, which cost a whole lot. But I agree to the fact that these manufacturers are making hay in our market.

There is a market for everything here, costlier the car, the more unique it is, there are people going after them.
Also, we do not have any brand loyalty, (Such as a Jaguar owner would again buy another).

We haven't had anything similar before. It is such a new age in India, over the last 10 years. Enjoy it while it lasts

[carmayogi]

My 2 cents worth:

1. Germans are furiously against launching entry (base) model cars to keep their range affordable. Example: no BMW manual option, no more "corporate edition" C class or 3 Series.

2. None of these three have invested in local production of any kind to reduce prices. Case in point, VW group could EASILY make their 2.0 TDI engine in India if they were serious about volumes. Yet they refuse even when they have more than 10 models with the same engine sold here (Passat, Jetta, Yeti, Octavia, Superb, A3, A4, A6, Q3, Q5 along with upcoming Beetle & Tiguan etc).

3. No base engined options are given in India. You could get a 1.6 TDI Octavia in Europe but not here even though we are more price conscious and efficiency conscious. There is no 1.4 TSI Superb, no 1.5 or 1.6 option on either A class, B class or 1 Series.

4. Manufacturers claim volumes aren't there hence they need to have higher prices for margins to be sustainable. This is actually a chicken and egg situation where until prices come down, volumes won't increase and until volumes increase, prices won't come down.

The one who should be moving first is the VW group by localising their cars in expensive areas like drivetrain, etc to really break this trend. A 15 Lakh OTR Yeti would certainly put the Duster in a spot of bother.

And finally, the Duster is sold at a price comparable to the Swift in the UK whereas here even the base model is more expensive than the Swift. Perhaps we need a watchdog to prevent unrealistic pricing strategy.

[kkkkkaran]

With the rapid depreciation in the euro valuation, im expecting a drop in prices in the coming future.
The euro has fallen by more 15 percent in value in the last 7-8 months. With major depreciation happening in the last 3 months..
That should bring down the cost of importing the kits, and also proportionately all the taxes applicable on the vehicle, since these kits are all imported from europe(if im not wrong).
Would it be wrong to expect atleast 6-7 percent drop in prices,probably even as discounts if not direct drop in ex showroom price?

[hothatchaway]

The category moniker says it all, the 'luxury' segment, which has traditionally been inseparable to exorbitant prices. Thats what you pay for the relative exclusivity of owning one of these beauties.

To my rational mind, there would not be a justification to pick a A3 over the new Octy given the bang for the buck with the latter. But then again, as Pataudi had once remarked to a flustered Chandu Borde when the latter pointed out to the Nawab that he was sporting a Sussex cap in a test match (having been hauled up earlier for wearing the Maharashtra cap himself), that Sussex was not Maharashtra!

Similarly, some cars are more equal than others.

[prakash_ajp]

The problem with having a bloated price and then offering discount on is that the road and other taxes don't go down, which doesn't make sense.

[mhr.manish]

This is a very insightful thread and is helping me a lot in my search for buying a continental car. To me, it looks like BMW would be offering the max discount vis a vis Merc or Audi.

For our fellow members, the European segment in the Automobile sector is referred to as Continental.

[pgsagar]

Honda/Toyota can only dream of German car image. But German trio can only dream of Honda/Toyota reliability. I find latter important. BTW, German car status/image is long gone. They are a dime a dozen on Indian roads. Come to AP. Even villages are teeming with them. No one gives them a second look. It is Jags and Rovers which are new rage now. A least here in AP.