[anb]

Originally Posted by KPR

Can I console myself with Mahindra cars as VFM in segment or more car per car ? I know this yardstick is debatable yet some facts they are.

More weight doesn’t mean more strength/ stiffness. Many car manufacturers use expensive materials and clever designs to keep the weight down without sacrificing the stiffness.

[Emvi]

Are the current cars overpriced? Yes and No.

Broadly speaking, the car prices have shot up considerably in the last few years, the reasons for which have already been discussed. However, an astute observation presents a slightly different story. The price of entry level cars (3-6 lakh rupees bracket) have maintained the status quo, by and large.

Related link-
https://www.team-bhp.com/forum/india...s-pricing.html (The curious case of the Maruti Alto and its pricing!)

The 'premium' hatchbacks/sedans, SUVs/crossovers and MPVs have probably become disproportionately expensive, so to speak. Simply put, cars are priced higher just because the manufacturers can afford to do so. Why? Just because people can afford them. Why? Just because the buying capacity has gone up and so have the aspirations of the people in general. This is one of the reasons why Alto is longer the best selling car! The change in mindset of people is pretty much evident. Even the first time buyers are looking beyond the entry level cars these days. The car sales volume in the 10-25 lakh rupees price bracket is a testament to this fact. Another interesting development what I have noticed is, there are numerous examples of people upgrading to cars a couple of segments higher from their entry level cars.The used car market too is witnessing this trend to a certain extent. For that matter, the shift in the buying pattern is evident even in commuter bike segment. People are mostly preferring 150cc+ bikes over 100cc bikes for commuting nowadays. And unsurprisingly, 150cc+ bikes have become more expensive in comparison over the years.

As long as people are willing to spend/splurge, manufacturers won't mind encashing the opportunity.

[Maky]

This is a subject I've discussed many times with people. I'm very interested in knowing what the consensus is on T-BHP.
If the OP or mods could please make this a poll : )

[vamsi.kona]

I am not sure tax(GST) is contributor to the overall rise in prices. From what I found, the pre-GST tax rates were in fact higher overall than what we are paying now, except for one or two segments of the cars as can be seem from the tables below, the second one is from April of this year.

The actual culprits, as pointed out by some already are likely to be the sharp depreciation of rupee, inflation and rise in costs of raw materials along with addition of features such as Airbags and ABS etc., which weren't present earlier.

Pre-GST and Post GST tax rates on cars/

Curent GST on cars

[aadya]

I would say most of the mass market segment, where there are atleast 3 choices available, prices are fair and equitable. Only few cars with no competition but high demand like crysta, Honda city(still many people believe in the brand) are priced higher by about 5 to 10%.

A comparison - my I20(uber -2013)MT Diesel Sprotz costed 7.6L OTR and the current generation I20 is 10.30L on road for the same variant. I would say of the 2.7L excess almost 1.2 Lakhs goes to the Taxes alone. A 5% inflation adjusted increase places it about 11.2L minus the excess tax added in the inflation index of 57k places the right price to about 10.63K. Voila we have actually a 30k lesser priced car with much more features than in 2013.

[wildsdi5530]

Originally Posted by KPR

Can I console myself with Mahindra cars as VFM in segment or more car per car ? I know this yardstick is debatable yet some facts they are.

That's fun.
However Tata was able to plan Nano at 1 Lakh only because of Tax benefits of within the factory courtesy Tata steel and Tata Motors being under the same umbrella.

[vivekgk]

Originally Posted by 2000rpm

The 10 lakh cars of yesterday, didnt have so many features which are a standard now

• Airbags, ABS, EBD, etc (I think the first gen City, didnt have a single airbag, my Civic 2007, had 2)
• Android Auto and Apple Car play
• Longer warranties
• Rear view camera and sensors
• Automatic wipers and headlights and IRVMs
• Auto folding mirrors
• All 4 power windows
• Sunroof
• Rear AC
• Detailed MID with so much data
• Connected Car tech
• Much better driving dynamics, especially for SUVs (try the first gen Scorpio sometime)

With so many additions, I think its natural for 10 lakh city to be at 17 now, especially after factoring in Inflation.

I'm gonna disagree. I paid 10.3 lacs for my Ecosport in 2016, and it had most of these features, and the top end model Titanium+ had leather seats and 6 airbags, as well as auto headlamps, etc. Granted the touchscreens and sunroofs anc connected car tech weren't available back then, but still it shouldn't take the price to above 50% more.

The Vitara Brezza ZDI+ had pretty much every feature you've listed in 2016, except for the sunroof and it cost under 12L OTR at the time.

I think it's just the frankly punitive tax regime that has totally messed up car pricing. It has driven up the costs of everything including the raw materials, and you're paying more than 50% tax on every new car. IT has also caused insurance costs and other expenses like warranties to go through the roof.

I used to wonder why even a basic touch screen audio system for a car costs above 20K, when an Android phone with a better screen, better specs, more storage and 4G connectivity option can be had for less than half the price, and an amp cost about half of that, mass produced. And I think finally tech like screens and connectivity features are now cheaper and easier for makers to include in a lower price bracket. Which is why we have cars like the Magnite and Kiger which offer so much tech at such a low price.

Where the difference is made up seems to be at the engineering level, especially with the low capacity engines. It's cheaper to reinforce a 1L block for turbocharging than to make a 1.2L engine. At the moment, it's anyone's guess how long the new 1L turbo petrols will last. They also seem to have made some concessions in fuel economy, as they seem to be a lot thirstier than NA engines.

[atnyia]

Originally Posted by vivekgk

I'm gonna disagree. I paid 10.3 lacs for my Ecosport in 2016, and it had most of these features, and the top end model Titanium+ had leather seats and 6 airbags, as well as auto headlamps, etc. Granted the touchscreens and sunroofs anc connected car tech weren't available back then, but still it shouldn't take the price to above 50% more..

Totally second your opinion. Like you, I bought a Ciaz diesel for below 10 L in 2015. It had projectors, airbags 6 speakers and ABS. Current car prices seem insane. A proper upgrade will set me back by 22 Lacs minimum. I earn substantially more since then and yet unable to see incremental value for spending that kind of money.

My personal opinion is that I have just grown old.

"Sab mohmaya hai" ( the world is an enchantment)

[IamNikhil]

Entry-level cars have still maintained their pricing in the same range despite most of them coming with such good features these days.

The real difference can be seen in the 10-15 lakh segment which has now moved into the 15-20 lakh bracket.

Also, case in point could be that of the Innova, which touches 25 lakh and beyond today!

[GKR9900]

I agree that inflation and general improvement in car creature comforts have played a role in rising car prices. The move to BS6 also have increased the car prices, especially diesel ones. But I still find it hard to digest that with the kind of money we used to pay for D segment cars a few years ago, all we can buy today are sub 4 metre crossovers. We bought an Elantra in our family, a 1.6 CRDi manual top end in 2012 for close to 18 lakhs. Buying an auto would have taken the price a lakh higher. Now this was a CKD unit with almost all the creature comforts that today's lot of cars provide. It had ventilated seats, heated ORVMs, soft touch materials all around the cabin and even a rear hand rest control for the audio system. The only things that shows its age are maybe the lack of a touchscreen system and LED lights, both of which can be added easily from aftermarket shops. In 2018, we bought a W7 XUV5OO AT for close to 18 lakhs. It too was fairly well equipped with auto headlights and wipers, hill hold, hill descent, keyless entry and start, and most important of all that big burly 2.2L diesel mated to a TC auto tranny. Now both of these cars had respectable safety rating as well. Today, a top end Sonet diesel 1.5 AT in nudging 17 lakhs. A Creta with the same 1.5 AT and same feature set, except maybe for the panoramic sunroof, with a different design and a slightly larger frame is nudging 22 lakhs. These are good products albeit with a questionable safety rating. But in our minds the comparison is always with the cars that we have. And I can't shake the feeling of being ripped off should I buy a Sonet for that price.

[@og_adi]

I think it all depends on our perception over cars that have been in the market for a while now. I'm just a seventeen year old and hence it is safe for you to assume the number of years I have spent researching prices/keeping track of the market etc. is far lesser than most BHPians. But, here are my insights over this-

Building a brand is great, it instills great confidence in a prospective customer to consider it. E.g- Toyota Corolla (Now discontinued). People mostly buy it for the brand it is, the successful run it has been having over the years,all over the world. But, the problem arises there- when you have a brand running for long durations, companies should realize that people are impressionable, and hence they can't keep cashing over it and milking money from them. Let me illustrate few examples-

1) In my mind, even today, the brand Safari is only worth 14 lakh rupees, assuming a +/- of 3 lakh rupees for different variants as it has an image of being rough and tough, crude in its ways. Sure, the new one is nothing like that, but that is the impression that vehicle built in me when I first saw it. The fact that the new Safari costs 27 lakh rupees OTR Bengaluru is beyond surprising for people who haven't been following the trend in pricing in the market for a while now.
Experience- We bought a Safari recently and when I told my uncle about it, he asked me why our pick wasn't the Fortuner. Little did he know that a Fortuner costed 40+ lakhs now. To him, a Fortuner is a 30 lakh rupees vehicle.

2) Being the biggest car geek in my house, I still feel the C-segment sedans- Honda City, Hyundai Verna are all 10 lakh rupee vehicles, +/- 3 lakhs. The fact that the pricing now starts from that range is something that takes time to digest.
Experience- Before buying the Safari, we first considered sedans too and my dad strictly instructed me to find one under 13 lakhs OTR, to him, a C segment sedan is only worth so. He was quite surprised when I told him he had to spend 15 lakhs for a decent variant. Sure it does come with more features over the years, but nothing changes as long it is the same brand he knew years ago.

3) Quitting all the explanation now, let me just give you the value that I fix for models.(All +/- 3 lakhs for different variants)
•Toyota Innova- 17 lakh rupees OTR vehicle.
REALITY- 21-30 lakh rupees OTR
•D segment sedans- 17 lakh rupees OTR vehicles.
REALITY- Only 2 exist, and the one that sells costs 32 lakh rupees OTR
•Suzuki Swift- 4 lakh rupees OTR(As it was so in 2008 when we bought our Aveo U-va)
REALITY- 7 to 10 lakh rupees OTR.

So to conclude, models that have been there for a while can cash some amount more than our expectations, but margins of 200+% over their initial values may be hard for many to accept. That said, it is not their fault that they keep track of all this as this impression based pricing varies from person to person as most non car people, go through the market only when they have to buy one.

[gigatech2006]

Originally Posted by YashD

It's the taxation which makes the car expensive in India. For e.g I just bought the Seltos HTX IVT Last year and here is the price break up just for the Ex-showroom price:-

Price of the Vehicle - 9,88,965
+ GST (28%) - 2,76,910
+ Cess (17%) - 1,68,124
+ TCS (.75%) - 10,755

Total - 14,44,755

Now, on this you add the remaining charges i.e registration, insurance etc and on that too you're paying a certain GST. In the end, when you're buying a car, almost 50% price is paid to the government. So, yes! Indian cars are overpriced drastically but I won't blame the manufacturers here but the government who has been taxing the automotive sector like absolute maniacs!

Right on point, my friend! Rising input costs and others are secondary. The enormous taxation is the main culprit. When I bought the Skoda Rapid style, the manufacturer price was somewhere close to 6 lacs and the final amount I paid to take the car out of the showroom came to 12 lacs. At some point, it's not about affordability, it's about value. A 16 lac rupee T-Roc in the EU will be 29 lacs over here (kinda, to make the point!).

Once people shift to EVs, I'm sure the govt will be itching to impose special taxes on batteries, and battery capacity, length of the car, extra boot space on the front, higher torque, for EVs reaching 0-60 in under 6 secs, 5 secs, etc.,and the cherry on the top will be increased electricity slab rates - to milk tax payers like us. Well, I'm tired of the government and the taxation policies. Anyways, it's just me.

[B103]

Taxes are definitely a big component.

Government wants to milk anybody who can pay taxes, to the hilt. And, this is the segment who pays out generously but gets zero benefits back from the Government.

No government machinery is catching up like the mining and analytics software of income tax department. Tax collection should have some sort of co-relation to the quality of life index as well.

It is high time that the tax paying middle class also makes an association and form a vote bank, without which, they will have no say and end up paying whatever money that Government wants him/her to pay ! Only crying baby gets any milk.

[Mustang Sammy]

Originally Posted by GNG19

I think it's a combination of inflation, rising input costs, a weakening Rupee, and finally taxes.

Try deducting the tax from any of the cars mentioned on the thread and seeing how much it would cost without the government's cut. Or substitute our tax with how much you would have to pay in the US for a similar product. I think this, in itself, will give you an idea why cars cost so much over here.

This. Vehicle owners are sucked dry by taxes and fees through the entire ownership cycle, while getting substandard products (esp. safety wise) and pathetic infrastructure in return.
This while the government touts the auto sector as an engine of growth.
End of rant!

[pavanmadhini]

Inflation is definitely one of the reasons, but when you realize that for every 1 rupee which inflation adds, the government is basically holding buyers to ransom and taking 1.5-2 more rupees, it becomes apparent who the real culprit is.

If I remember correctly, for each Creta which costs 20L OTR, Hyundai only gets about 8-9 lakhs.