[DGSCS]

Hi all,

Just came across an interesting read on the quint. Thought of sharing it with all of you as well:

https://www.thequint.com/opinion/mid...rore#read-more

EDIT AND UPDATE

My apologies,

At the time of submitting this thread on Friday, the article was available for everyone. I see now that it has been put behind a paywall and is no longer accessible.

The article essentially stated that a few years back buying a car as a middle class person with your first raise was almost a rite of passage. However, now young people are no longer getting good raises. Even white collar professionals who have risen to middle management are stuck with same salary packages for years coupled with the shooting car prices makes it difficult.

As per FAD dealers across India have more than 7 lakh cars worth 70,000 crores lying unsold. This is twice the inventory they normally would like to hold. Link for source, which is not behind paywall : https://www.business-standard.com/in...2100636_1.html

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.

[GTO]

Thread taken live - thanks for sharing!

[JithinR]

Though I am happy that at least some publications are going against this insane perception that car manufacturers have built of pieces flying off their dealer lots and insane waiting periods of years being normal.

[alpha1]

I am told young people don’t buy cars anymore. Not because they don’t want to, but because they can’t afford them

And I held the view that income levels are increasing generation by generation, decade after decade. Cars are still "status symbol" and definitely desired by most public, in spite of the inconvenience of rising traffic jams and the general time (and space) wastage on personal vehicles. The two biggest one-shot expenses are house and car: and I don't see this ebbing any time soon.

Conversely, I remember reading Jeroen's statement that young folks in Europe are not keen on buying vehicle because "owning vehicles" is no longer a priority for them.

[fhdowntheline]

Rather I would be interested in a discussion on the potential aftermath of the present scenario. 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.

[Fuldagap]

Vehicle sales figures are a great indicator of the health of the economy.
Interestingly the FMCG sector has shown continuous decline too. Most companies registering a loss for past many quarters.

[DGSCS]

My apologies,

At the time of submitting this thread on Friday, the article was available for everyone. I see now that it has been put behind a paywall and is no longer accessible.

The article essentially stated that a few years back buying a call as a middle class person with your first raise was almost a rite of passage. However, now young people are no longer getting good raises. Even white collar professionals who have risen to middle management are stuck with same salary packages for years coupled with the shooting car prices makes it difficult.

As per FAD dealers across India have more than 7 lakh cars worth 70,000 crores lying unsold. This is twice the inventory they normally would like to hold. Link for source, which is not behind paywall : https://www.business-standard.com/in...2100636_1.html

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.

[Sk8r]

How could we ?

Even after paying so much tax, what do we get in return?

- Broken roads
- Additional toll
- Wrath of road rage and having to fend for ourselves
- High tax on fuel

Source : Cartoq

[Carma2017]

The fact is that there are two Indias.

One, is the more upwardly mobile and is a well to do India who looks at Cars starting from say the Nexon as the basic requirement for Mobility. That India is not averse to buy a top end Creta or a Samsung Galaxy Watch Ultra as their first buys. They can imagine having two separate cars for City and Vacations. This category of people is not restricted to Cities but resides in Towns and villages as well.

However, there is another India, which truly cannot afford a Car or if they can, it is just a medium of travelling from Point A to Point B within a Budget. A Car for them is no more or no less. It is these people who have not yet recovered from COVID Pay Shock and a Car is the last thing in their mind. When this segment recovers and gets back it's buying power, we will have another logical sales growth, not the current YOLO backed buying.

[TorquePull]

I think there was a flurry of new car sales that was due to artificial demand created by various government departments, in the name of various schemes to boost their tax revenues among other things. Now that has settled, along with slow economy has hit the car industry hard.

[PreludeSH]

Just look at our dismal per capita income (2500$). Even our middle class income will be low and is categorized from 5 to 30 lakh rupees. The problem is economics. We can only afford 2 wheelers and not cars. The cost of cars themselves with all the taxes might be a factor having to pay twice of that in advanced countries. But even then major factor is our economy and state of people.

[Motard_Blr]

My wife who uses her car everyday mentioned she was tired of driving. So I asked her if it would help her if replaced her manual transmission car with an automatic transmission car. She refused saying that it's the traffic that's tiring. She doesn't mind the clutch and gears.

I commute to work by metro. The few times I've done the commute by motorcycle, I've regretted it.

So I can think of a few reasons why people don't buy new cars:
- terrible traffic
- no parking in many places
- high investment
- low return on investment in terms of pleasure of driving since most driving is inside the city
- working from home is more common
- since the pleasure from driving is not present, money is spent on other goods such as expensive home theaters or holidays that are perceived as high on experience factor.

The itch to replace the car was getting stronger until now. I think I'll hold on for as long as possible before replacing it. Bangalore traffic is only going to get worse with more flyovers and metro lines under construction. And when I do replace the car, I don't see myself spending big money on a big car for the above stated reasons.

[anandhsub]

Originally Posted by Carma2017

The fact is that there are two Indias.

One, is the more upwardly mobile and is a well to do India who looks at Cars starting from say the Nexon as the basic requirement for Mobility. That India is not averse to buy a top end Creta or a Samsung Galaxy Watch Ultra as their first buys. They can imagine having two separate cars for City and Vacations. This category of people is not restricted to Cities but resides in Towns and villages as well.

Just to add. This India, atleast in Bangalore, can also afford to wait and buy better cars like Nexon and Creta because of Metro/ Uber/ Ola. Pre 2015 or so it was a must to buy a car within the first year of working as commuting by bus was considered "below status", and an Alto was considered better but now an "Alto" is considered "below status" and would rather commute by Metro/ cabs until one can afford better cars.

[Vibhav-Van]

Originally Posted by DGSCS

However, now young people are no longer getting good raises.

From my recent experience in hiring for my team and also hearing from my wife who's a hiring consultant - It's not like the older days where a fresher would jump with joy on getting an offer. They seem to be more concerned about timings, work-life balance, leaves, over-time, etc. When I graduated, the only thing on everyone's mind was just to get a good offer. We didn't even think of all these conditions. Younger folks today are ready to even refuse an offer for these things. So I think it's a general change in the attitude as well - From a 'slog-off' attitude to a 'balanced life'. I feel that short term outlook to balance is harming growth.

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.

Cars have gotten very expensive, and in the smaller category by an unreasonable percentage of the base price thanks to stringent emission and safety norms. The sub-4 metre regulation was one big catalyst. I feel we need another one now - a Kei car movement like a sub 2.5 metre rule, along with ultra narrow width. That can propel personal mobility to the next level. I still can't figure why we don't have electric quadricycles. That is what we need as a country, with narrow streets and poor public transport.

[Nithesh_M]

Our cars haven't really gotten all that expensive compared to other countries. Its our salaries that haven't matched inflation. Government loves to gloat about gdp and fastest economy but in reality we are way below even our south east Asian neighbours in per capita income.

And the IT companies where basic engineering graduates could earn a 33k salary per month about a decade ago are still paying new recruits the same salary. How will anyone afford a car with that low pay when rent and groceries have shot up multifolds within the same period?