[Ragsk747]

In today's car scene the manufacturers advertise the car at launch with a lower base price. For some cars the difference between Base variant and Top variant is almost 2x.

I wonder is the cost justified. Any views from experts!


For example:
Renault Kiger Base variant RXE MT is 6.85L, where as top variant RXZ CVT Turbo is 12.03L

Similar case with several others like XUV700, Creta etc

[hellmet]

I see this as a personally confusing trend as well. Cars are now coming equipped with a lot of gizmos and features, special editions, multiple engine options - NA, Turbo, CNG - and this spreads the variants' pricing across 2-3 segments.

Kia Carens' top variant, for example, is almost 2X the base variant. The base variants are a lure into getting you to believe a care is VFM, but on the shop floor, you'll end up spending big ones once you realize the base engine and feature list are terrible.

Also, for someone like me that prefers less choice, this strategy irks me personally. As an example, I used to be a fan of Apple's simple product offering, but ever since they introduced a zillion iPad variants, I lost all interest in the tablet. I've been away from the Indian car market and when I look at it now, I'm unsure which segment car I'm looking at. Plus the fact that almost all new cars are now "SUVs" doesn't help my stupid brain.

I still prefer Maruti's simple pricing strategy and also why I like Punch's pricing (as an example) as it only has one engine and a handful of variants.

However, I know many members on our forum like multiple engine options, and prefer the spread and cannibalization. So, to each his own, I guess

[Dr.AD]

Originally Posted by Ragsk747

In today's car scene the manufacturers advertise the car at launch with a lower base price. For some cars the difference between Base variant and Top variant is almost 2x.

I wonder is the cost justified. Any views from experts!

I do not see this as a problem at all. The 2x cost difference comes due the wide variations in engine options, transmission options, and other features. Basically this just means a wide range of choices to the end customers. And I think that is definitely a good news for the end customer.

Whether the cost is justified or not is for each individual to decide. There can never be an universal answer to that question. Someone may find the base variant price to be justified and may buy that. Someone else may find the top variant cost (2x the base variant) justified and may buy that. But the good news is both get their own choices.

I personally feel multiple engine+gearbox choices is a great thing and I love to have a choice of what engine + gearbox works for me. For example, I really like that the newly launched Slavia has a 1.5TSi + 6-speed MT option. If I were to buy a Slavia, that would my configuration. But I am aware that most others would take the 1.5TSi + DSG combo. And it is great that they have that choice. And then some others would take the 1.0 TSi option (as seen in our recent poll on that topic). And it is again great that they have that option too.

Such wide variations in product prices based on configurations are not uncommon in other things as well. For example, when you configure a laptop computer, depending on the choice of CPU, GPU, RAM size and the screen resolution (among other things), the price can easily double compared to the base configuration. And most laptop buyers like it that they can configure the laptop as per their needs and their budget. Nothing wrong with that. So why would this be a concern if cars come with similar configuration options and price variations?

So in short, more choices for customers is something that we, as customers, should welcome. A wider band of price range is good for customers. I do not see any problem with this trend.

[The Rationalist]

One thing that I don’t like is not selling automatic options in lower models, it’s like excluding many customers from automatics. The first company to equip lower models with automatics will definitely get very good numbers and goodwill. Look at Volkswagen and Skoda sales, they have sold the same number of cars in 2011 and 2021! Absolutely no improvement, in fact the sales was lower!!! And still they are hesitant to equip Slavia & Virtus 1.5 AT in base models. They really have a myopic view of market. They think the sales of top models will be affected, let it be. The more the number of cars sold, the more visibility and chance of retaining when they upgrade.

[museycal]

In my humble opinion, the base variants of affordable cars haven't really evolved much as compared to, let's say, 10 - 15 years ago. While the top variants, they have become different ball game altogether. The usual top variants today feature - auto headlamps, auto wipers, sophisticated infotainment systems, steering mounted controls, rear AC vents, better upholstery, connectivity suite, sunroofs, Auto ACs, projector lamps (sometimes LEDs), beautiful DRLs, engine stop start buttons, request sensors, designer diamond cut alloys, digital dashboard, auto dimming IRVM, auto folding ORVMs, reverse camera, heck, even ventilated seats (I am sure the Hyundai's list will be even longer)!

And this, for exactly same powertrain too. Case in point, the i20 Kappa 1.2 - Magna to Asta (Magna was still a trim above entry level for Hyundai, IIRC entry used to be Era for some models), XUV3OO 1.2P Manual W4 to W8(O) (one of the most well kitted top model under 15L) and Nexon 1.2P XE to XZ+ Premium. And I think its good for us, the buyers, in terms of choice.

Adding different powertrains to the equation just spices the difference of prices between the base and the top variants even more.

Hence, I feel the advertising with low starting price of base variants is justified, especially for cars with good powertrain options right from base variants (XUV7OO with 200 HP petrol engine at Rs. 15.5L OTR in Pune, XUV3OO 1.5D W4 and W6, Hyundai 1.0L TGDI cars in Sportz trims under 11 Lakhs are some very good value for money cars. Even Kiger Turbo RXT for that matter).

[asit.kulkarni93]

Slightly off topic-

But a lower starting price is also indicative of the engineering that has gone behind the vehicle. The Korean cars may start at a lower price and the higher variant maybe full loaded but the structure is unstable as we have seen in the crash tests. I personally feel a major variation in the feature list is just there to take the customer for a ride. Things like a stable structure, good suspension & engine cost much than features like sunroof, ventilated seats, carplay etc.

[Thermodynamics]

Sticker shock marketing at best. While most cars fall in that category, few models do have impressive base variants, Kia Carens is a good example.

Originally Posted by The Rationalist

One thing that I don’t like is not selling automatic options in lower models, it’s like excluding many customers from automatics.

automatic in our market is perceived premium unfortunately.

Originally Posted by The Rationalist

The first company to equip lower models with automatics will definitely get very good numbers and goodwill.

Toyota did that with Yaris. Even a base variant had CVT optional. But they couldn't price it competitively enough to challenge the hallmark City and the then superstar Verna.

[yogishkamath]

I spent a bit of time thinking about this specifically for the XUV700.

For each variant jump, I looked at the additional features on offer and considered whether the extra amount we were being asked to pay was worth it ... For most variant jumps, the answer was a clear yes and for one or two, it was debatable. There wasn't a single jump that felt ridiculously overpriced.

You should do a similar exercise for the car that you are considering. While doing this, you would do well to remember that for each extra rupee that the manufacturer earns, the Government steals 50 paise from you.

[kartavya]

Originally Posted by asit.kulkarni93

Slightly off topic-

But a lower starting price is also indicative of the engineering that has gone behind the vehicle. The Korean cars may start at a lower price and the higher variant maybe full loaded but the structure is unstable as we have seen in the crash tests. I personally feel a major variation in the feature list is just there to take the customer for a ride. Things like a stable structure, good suspension & engine cost much than features like sunroof, ventilated seats, carplay etc.

This has exactly been my thought process when buying a car. I don't value paying for features over structure/suspension etc. I always prefer buying a car with a single variant or variants closely matched (Tiguan/Kodiaq). My issue is the build quality as you mentioned.

[chaosengine]

I am no expert but I am still going to give my (possibly unsolicited) opinion anyway.

I think there are different perspectives here. Price bothers me less, what bothers me more is the variants, their pricing based on features removed/added. (My biggest pet peeve remains the W6 vs W8 variants of the Mahindra XUV300 - you add a sunroof and strip more crucial features in the W6, and then remove the sunroof and add more features to the W8? It makes no sense to me - it is almost as if Mahindra is dead set on killing any chance of XUV300 seeing the light of day.)

1. A car like the Renault Kiger comes with a bunch of sensible engine and gearbox options, but if you boil it down to just variants, it is more of a permutation and combination of NA/Turbo, Manual/Auto, RXE/RXL/RXT/RXZ. And the 2x factor is more likely with budget options than with expensive cars since the price differential for double the asking price is harder to justify (exceptions being XUV700, BMW).

2. What triggers me is when all engine options are not given with multiple variants, or if certain variants are restricted to some engine/transmission options only. Mind you, I understand the strategy of Maruti Suzuki not giving an AMT with their base variants on some cars. A couple of examples:
- I really don't get the funda of Hyundai Grand i10 Nios NA vs Turbo - granted they want to keep costs in check so it does not encroach into i20 territory and cannibalize it, but is Hyundai saying that if a customer wants to invest in a Turbo engine for i10, he cannot get it in Asta with a rear wiper?

2. Skoda Slavia/Kushaq - I'd have liked if the siblings could offer the 1.5 on at least the Ambition and not necessarily just the Style. Sometimes, just for the engine, I might be forced into investing into features that I really don't need, or compromise on the engine and get features that I truly need.

Apologies for my little rant, I probably did digress, a LOT.

TLDR: I'd rather have costs of variants in cars like the Sonet, Venue, Kiger span over many lakhs than be restricted to certain variants and begrudgingly have to make a compromise. In a day and age when gizmos are in abundance, customers who treat the car as just a machine having bare minimum features, and customers who treat the car more as something with a bunch of latest tech and gizmos are treated alike.

Originally Posted by Ragsk747

In today's car scene the manufacturers advertise the car at launch with a lower base price. For some cars the difference between Base variant and Top variant is almost 2x.

I wonder is the cost justified. Any views from experts!


For example:
Renault Kiger Base variant RXE MT is 6.85L, where as top variant RXZ CVT Turbo is 12.03L

Similar case with several others like XUV700, Creta etc

[GTO]

I have no problem with this. As Dr.AD said, it's about giving customers the choice. However, what I do have a problem with is the blatant "bait & switch". Many times, we see the base variant being launched at a very attractive starting price, but it's never available in the showroom . Its sole purpose was to show a VFM image and bring customers into the showroom. Once in, they realise the base variant isn't being dispatched by the factory at all. Or it is in tiny, namesake numbers.

Originally Posted by DicKy

Yeah, went for a test drive and the SA outrightedly said the Base variant is not available and struck it off in the price list.

By the way, top variants costing twice the price of base variants is prevalent across segments. At the higher end too, you'll see the Maybach S-Class & Maybach GLS costing twice that of their more "regular" siblings. Then of course, we have the //M & AMG versions that cost 2 - 3X the regular cars.

[Latheesh]

Originally Posted by Thermodynamics

Toyota did that with Yaris. Even a base variant had CVT optional. But they couldn't price it competitively enough to challenge the hallmark City and the then superstar Verna.

Not competitively priced? Yaris base variant with CVT (it had 7 airbags) was priced @9.95L ex-showroom. It was better screwed together than the Honda City.

[Sahil]

Originally Posted by GTO

At the higher end too, you'll see the Maybach S-Class & Maybach GLS costing twice that of their more "regular" siblings. Then of course, we have the //M & AMG versions that cost 2 - 3X the regular cars.

While true, I don’t think this is a fair comparison for the topic of discussion here. The Maybach has a whole lot more than the regular variant and you are also paying a whole lot for its badge value. In a maruti VXI to ZXI, no one is paying for this badge value.
Moreover with the AMG and M , some again paying for a badge value but most paying for a performance level that’s way more than the regular car. At the lower segment there is seldom a difference in engine from base to top end.

What could be a fair comparison here from the luxury segment is E class expression vs exclusive variant. The price difference is 10% here.

The luxury segment is milking it with just top variants. Very few cars like the E even have an option of a lower variant.

It all boils down to the ticket size I guess, smaller the ticket size the more the difference in % between top to lower variant. The main reason I think is that the price hike is done at rupee value not in % value by the car markers at lower segment.

[naru80]

Another aspect of this strategy (especially for budget cars) is that what is acceptable in base/lower variants can be a potential deal-breaker in top model.

I TDed the Kiger and the quality of plastics/interiors is fine for the 6-8 lakh bracket but is a sore point of you're spending over 12 lakhs for the top end.

[tiagoatrix]

For the price of top end SXO Creta, you can buy two base petrol models, it's quite ridiculous to think at first. But does the customer have any other choice?

Our needs have grown, Air con at home was once a luxury, but now its a necessity. Similarly automatic cars have become a necessity. Manufacturers don't make as much money in base variants as in top end models. So we are spending more money for our choice.