[Rajjaiswal92]

It is not all about just cost of ownership but also the hassle which comes along with owning a car.
My friends who are doing well in their respective careers married or unmarried residing in metro cities like Delhi, Mumbai etc are refraining from buying a car just because of the hassle that comes along with it, the cost of buying one isn’t a deterrent.
Case 1 - Married friend in early 30’s both are working in finance doing really well but don’t want to buy a car it is more cost effective for them to take an Uber or Ola as 80% of their commute is within 10km radius and at a fixed bracket of time.
On weekends they use a rental which gets delivered to their house and is picked up from the same place.
This results in no hassle of cleaning, up-keeping, servicing or parking the car.

Case 2 - Unmarried friend lives in Delhi in marketing analysis, owns no car but a 2 wheeler for emergency purposes, bought a house a year back which came with a car parking he has rented his car parking unofficially to an other couple in the building giving him an extra income. Primary source of transportation again uber or ola.

Owning a car in metro cities makes no sense these days, there is no joy of ownership but hassle of ownership.

[vm27]

Originally Posted by fhdowntheline

Will car sales taper off into a plateau and then decline after a few months?
What would be the impact on the ecosystem as a result?
Would government put money in people's pockets to alleviate the situation?
What about the secondary markets? There would be an immediate impact.

The present situation of such overwhelmingly large inventory with dealers is actually quite alarming, even though it may result in good discounts for the buyer.

India is heavily dependent on the automobile industry, which includes the ancillary support industry as well.

While researching on some topic last year, I found out that 7% of India's GDP comes from this automobile sector. Approx. 40%+ of our total manufacturing GDP is the combined main and ancillary automobile manufacturing.

A decline in vehicle sales will eventually lead to a recession. This is just how a bumper harvest would lead to increase in FMCG sales.

Originally Posted by ksaurabh21

our finance ministry has been quite innovative in increasing the tax burden e.g. introducing tax on epf, increasing LTCG, doing away with indexation benefits, etc.
As a middle class person, I feel now I need a larger corpus than what I had planned earlier for an uneventful retired life. Which translates to holding on to my old car for longer duration than to give-in to the itch of upgrading for better features.

Totally Agree!
Unfortunately, even after 10 years in the post, our FM doesnt seem to understand economics.
The salaried class has next to no avenue for wealth creation. Hence monthly savings and small profits from investments are the only solace. Taxing even these meager earnings on already heavily taxed people is going to not only get you memes made in your name our of angst but more importantly start a very deadly and vicious slow down in the economy.
After all, I eat onions and their price bothers me!

[raghut456]

Here are the issues I can think of:
1. Car manufacturers are unreasonably increasing prices in the name of adding features.
2. Essential features like the rear defogger and wiper are only available in the high-end variants.
3. People are purchasing their first cars but are not upgrading because they don't find it worthwhile.
4. There is a restriction of 10 years on diesel cars in Delhi, and there's a fear that this restriction might expand to the entire nation.
5. Concerns about the mileage of turbo petrol engines in city traffic.

[slamnos]

Just sharing my 2 cents.

7 lakh cars in stock is not a big concern, basically its 2.5 months retail stock (assuming Indian customers buy around 3 lakh cars a month). It could be because some models sales projection might have gone wrong (by manufacturers' planners). Either way its a common practice to have a month's stock by most manufacturers.

Adding to that could be consumers' choice of not buying because of congested cities and pain of driving in one.

Higher taxation of cars is an obvious reason.

All these reasons collectively could be reason for change in trend.

However on the other hand industry across segments is growing, especially big hatches, compact SUVs, which are typically bought by middle class. So salary might not be the biggest reason for this changing trend.

[amit1agrawal]

I have been wondering how people are able to afford high priced cars when real-estate, education & other misc. expenses have skyrocketed in the last 4-5 years. Except very few lucky ones, the salaries have not kept pace with the general inflation (not referring to govt. calculated inflation which is not real for middle class). Real-estate cost in Bengaluru has grown 50%+ in this period, education even more. We are heavily taxed country and car as an asset is taxed even higher. Neither the roads nor the traffic allows one to drive peacefully. In fact, I take my car out mostly on weekends when going out with family or for highway runs. Gone are the days of taking car out for a ride.
My car in end-2010, a C2 segment sedan costed me tad less than half of what similar car costed in 2022. My friend brought XUV 5OO for 17L on-road in 2017. Now XUV 7OO for similar variant costs double the amount. If I extrapolate to future, when my current car is due for replacement in another 10 years, I will have to shell out 45-50L. It would simply be unaffordable for me considering I would be very close to retirement! I am sure other salaried people would be in same boat as me.
Car companies have to be realistic on their pricing strategy else there won't be many takers.

[CafeRacer16]

As much as I love cars & found long drives relaxing, rampant traffic, no parking, bad roads & now road rage in Bengaluru roads has created such a phobia that taking a uber gives me better peace of mind.

I nowadays don't advice anyone to upgrade or purchase a new car. If its an absolute requirement then best is to go the pre-owned route so that you have a car for emergencies.

[diwakarmuthu]

Originally Posted by DGSCS

10 years ago, small and mid sized cars accounted for 64% of all cars sold, however, today that has fallen to just 35%. There has been a decline in sale of 'middle class' cars.

Exact opposite is happening with cars bought by richer people with multi utility vehciles which made up just 18% car sales in 2013-14, shooting up to 57% last year.

From an industry perspective, if there is one part they have assumed wrong, it would be the product mix. Small cars are essentially being sold in Tier 2, 3 and 4 towns and not in metros. It would be good to understand what percentage of the 70k inventory has small cars (Alto, Wagon R, Hyundai i10, Eon, Datsun Redigo, etc)

Aviability of credit, company car lease are primary motivation factor for buyers to go for higher segment cars. Managing a 5-7 lakh deficit through a loan is not a major point of concern now.

The evolving used car space is also moving buyers away from new cars. I personally find the used car space more attratctive as it provides more variety and flexibility (For instance, you get good deals on Creta, Seltos or even oldies like the Ecosport, Skoda or VW)

Finally taxation plays a big part. Crazy policies like different taxation norms for sub 4m cars vs bigger cars are driving buyers crazy (I am one for sure)

The Govt. may come up with a scrppage policy to reward buyers for purchasing new cars. But, it wouldn't make much sense IMHO

[amolathalye]

Hi All ,

This is very interesting topic for all car lovers. It's evident that we all will have even tougher time in near future when the Bharat Stage 7 is introduced in 2025 as that may increase car prices further more. In view of this , is this the right time to replace your aging car or go for the upgrade.

[DGSCS]

Originally Posted by amit1agrawal

My car in end-2010, a C2 segment sedan costed me tad less than half of what similar car costed in 2022. My friend brought XUV 5OO for 17L on-road in 2017. Now XUV 7OO for similar variant costs double the amount. If I extrapolate to future, when my current car is due for replacement in another 10 years, I will have to shell out 45-50L. It would simply be unaffordable for me considering I would be very close to retirement! I am sure other salaried people would be in same boat as me.
Car companies have to be realistic on their pricing strategy else there won't be many takers.

This is so true, when my dad bought our Octavia in 2016 (not a middle class car as such) it costed roughly around 21-22L, and just last year before discontinuation the new gen Octavia was priced at 33-35L. That is almost a 50% jump in a matter of 7-8 years. Inflation and prices are sky rocketing, and coupled with stagnant earnings are reducing the purchasing power of the people. For us car lovers who always want to get better, it is becoming hard to even stay and sustain at the same level.

[ndp88]

Interesting topic. My quick thoughts -

• Sale of 'Brand New' cars might be down. But secondary market might be flourishing.
• Secondary market has become organised like never before. You can sell your car in 30-40mins. Also you can buy a 2nd one quickly now. This is unprecedented for Indian Auto market. Reliability factor has increased.
• Brands like Spinny etc have made it very easy to rotate your cars. I think people have also realised that cars are depreciating assets, and value is more important than 'smell of a new car'. It is good thing imo. We are value-conscious country.

[eyesice]

I used to have this syndrome of always wanting to buying a new car every 4 - 5 years despite knowing that it's a depreciating asset. Nowadays, I just cannot imagine driving a car in the city forget long trips on the highways. My office commute is 8 KM away which used to be excellent 6 lane roads. I enjoyed driving precovid as there would be manageable traffic.

Now the quality of road infrastructure has gone down significantly and the number of cars and other vehicles have exponentially shot up in the past 4 -5 years. What took me ~35 mins to commute one way now sometimes takes around 75 - 90 minutes. To top it off, on a good day with "light" traffic my Rapid TSI returns 9 KMPL.

Highway trips are a chore as well. You have to plan carefully and avoid weekends especially in the GST as Chennai - Trichy (~350 km) would seem like driving in dense city traffic on a weekend.

I often think I have lost the passion for driving in general but that is not the case. I get that 1 or 2 days in a year where the roads are buttery smooth and empty and I get to satisfy my inner peace.

The final aspect that I feel as someone who have been driving for the past 15 years is that there aren't any cars in the sub 30L bracket that screams "Buy me!". As a middle aged guy approaching my 40s, I have zero interest in electronics and other gimmicks. Gone are the days where you had well built, fun to drive cars that were affordable for a salaried guy like me.

I am content with my Rapid TSI and our family's Abarth Punto for atleast the foreseeable future.

[mukeshgoel]

Just a thought. Almost everyone is saying:

1. Number of vehicles have increased so much in last few years that driving is not enjoyable like it used to be.

2. Car makers have increased the price unreasonably because of their greed and to increase their production capacity.

3. Extremely high percentage of tax have made vehicles very expensive and unaffordable for many.

Planning to buy a car in next couple of months so obviously not in favor of high prices and high taxes but imagine the number of cars on road if the price/taxes are reduced and cars are made more affordable.

Government is happy getting enough tax money with these many cars sold and they know the roads and infrastructure can't handle more vehicles. Why will will they consider reducing price?

[DevendraG]

I believe most millennials who are doing good are the lot picking newer vehicles as replacements or additions to their garages. They have passion for cars.

GenZ on other hand are not interested in driving given the road and surrounding conditions they saw while growing up. They prefer being driven.

Another view is that a lot of people want early retirement and are getting value conscious. They prefer investing more than purchasing cars, homes. They’ll get them once they reach a comfortable position later and mostly with dual income of both spouses. Also they prefer spending on travel, experiences etc which they cherish much more than a car.

[rakesh_r]

I always had the habit of replacing cars every 6 years. However, i have decided to buy something which is reliable and keep it for 15 years and more. I feel it's no longer worth investing good amount of money especially on high end cars when you don't get good roads, coupled with high taxation and congestion. There are only few highways where you can maintain triple digit speeds.
Have decided to buy a Toyota and forget buying anything for the next 15 years.

[flashgo]

I believe it is a global phenomenon. Car prices around the world (except for EVs) are going up. Cars that used to cost around $20,000, such as the Toyota Camry and Honda Accord, are now in the $35,000 range. The global economy is slowing down, and this is reflected in changing consumption patterns. Wages are stagnating and are not keeping up with inflation. In the USA, car payments have increased so much that many people are keeping their cars longer than usual.

In India, car production costs have definitely increased, partially due to expensive raw materials, supply chain issues, and the increased use of electronics in cars. Although supply chain issues have mostly been resolved, prices have not decreased as expected.

Post-COVID, the salaried class who were unaffected by the crisis had accumulated good capital and wanted to buy cars to avoid public transport for safety reasons. IT professionals have seen unprecedented salary increases, which in turn has driven demand for larger and more expensive vehicles. This increased demand has put pressure on the automotive sector, which has taken advantage of the situation by inflating prices and, in many cases, creating artificial waiting times. They enjoyed this situation until the market began to show signs of a slowdown. Now, IT professionals, who were frequently switching jobs with large salary hikes, are starting to lose their positions due to layoffs, and salary increases for the salaried class have stagnated. Many people I know are afraid to make a big commitment due to the uncertainty in the job market, which is now hurting the automotive sector and leading to massive discounts.

I believe that the significant increase in traffic on urban roads is a direct result of the high sales period post-COVID. However, the infrastructure has failed to keep up with this increase. This has led to driver fatigue and increased road rage, as drivers are often tired and frustrated.