[raul]

This has been beaten to death here on and the taxation bogey has been discredited every time yet it comes back.

This is nothing but rampant profiteering by car manufacturers using the cream strategy due to the vast income disparities in India, so a section of the population are not price sensitive while most are. For instance if someone can pay 15 lakhs for a car here they will probably be able to pay 20 without sweating too much, so why would the pricing manager leave money on the table?

The more professionals we have, the more demand will get in sync like other developed economies where labour tends to be expensive and driving demand. The XUV on this board sounds like the cheapest vehicle since sliced bread but it actually costs 15 lakhs, that's more than the the cost of CRV, RAV4 and other SUVs in the US, and these are not perceived as cheap in the US with 10 times our income levels so I don't see how it can be perceived to be cheap here unless everyone on this board is super rich.

Coming back to tax, other countries have tax too and places like US, EMEA have extremely high labour and business costs, simply environmental and safety regulations add up significantly, the cars in the US for instance are automatic and seem better built with more features yet they are half the price.

The other arguments is recovering capital costs but that's a non argument as you would have to do it in any region, then comes volumes, sure the US volumes are high but sell the CRV at 15 lakhs here like in the US and see volumes quadruple so another dubious argument. Low prices lead to high volumes and high prices lead to low volumes and its not the other way round.

Using tax policy to artificially limit cars affordability like Singapore is a completely different issue and not what is being discussed here so best to have that discussion elsewhere.

Things are getting better, at least we have started getting essential safety features like airbags, etc but some way to go on pricing. The least we can do is not pass off relatively expensive vehicles like XUV as cheap and give manufacturers the wrong idea, XUV is not cheap, in an overpriced market it just seems so.

[StarScream]

Originally Posted by ganeshram

Simple plain reason - I did not feel like paying such huge amounts for these cars!

Ganesh, so true, I was thinking exactly the same thing the other day when I was looking at prices and thinking of replacing my car. Like you, I decided against it. I can't bring myself to spend $30,000 on a Corolla. I can understand taxes pushing the price to 20k, even $25K, but $30k is just usurious.

Originally Posted by akshay1234

Its all because of the taxes.

Originally Posted by lejhoom

It is the tax structure in this country that makes the consumer pay through the nose.

Originally Posted by anekho

Taxation is the answer.

I would like to humbly disagree that tax is the reason for this. Yes, it's a fact that taxes in India are higher than the U.S. but that doesn't explain why a car like the Corolla that cost 10.5 lakhs, costs 13 lakhs now. Or take the Civic for that matter. The tax structure hasn't changed that dramatically.

Honda, Toyota or any other car maker won't dare raise prices like that in the U.S. market where they are expected to bring out better cars at the same price points. I can, to some extent, understand the price increase in the City, compared with the NHC, as you got a full set of safety features in every variant of the new model. But Honda's recent price cuts on the City and the Jazz show what's possible. They aren't losing money on those cars and they are now priced reasonably. The City at 7 lakhs is a steal.

In my opinion, the sweet spot for cars is the C segment (as GTO keeps saying the City is 90% the car that the Civic is) and the sub-4 meter segment, where you get some world-class products because of the lower excise tax rate.

Of course, that doesn't help Ganesh, who wants to upgrade to a larger car. But for me buying another C-segment car seems to be the most value-for-money option.

[shankar.balan]

Originally Posted by ghodlur

The horrendous pricing of some of the cars is in a way of the car manufacturers trying to recover their cost of investment. Another reason is the competition amongst the siblings brands of car makers. One way or the other the money still goes to their kitty.

If you see the cost of living in India has increased many folds which is why the car makers arent shying to price their products over the top. Earlier car was a luxury, today its a need. The aiding by the Govt in terms of taxation is another blow and thats a different ball game all together.

I would say that the lines between 'need' and 'want' have blurred considerably. Coupled with higher disposable income and desire for 'status' lots of people are buying these cars without batting so much as an eyelid where otherwise they may probably have thought twice before taking the plunge!

[ganeshram]

Originally Posted by StarScream

Of course, that doesn't help Ganesh, who wants to upgrade to a larger car. But for me buying another C-segment car seems to be the most value-for-money option.

After 4 -5 months of new car hunting, I think I have finally found my love. And the interesting thing is that she has been around for quite some time now. It is the Optra Magnum. One thing I just loved about this car - Space. And a proven engine. And to top it all, wonderful pricing. And the features I need. The top end sells at close to 11.5 in Bangalore. This is one car that I feel is priced right. The Cruze might be a looker, packs in a lot of gizmos, but ultimately it is smaller than the Optra. And priced at 18 lakhs . Same with the Fluence - 18 lakhs and a 1.5 litre engine - not for me. Lesser said the better about Jetta and the Laura.

Opinions are welcome!

[amitoj]

Originally Posted by ganeshram

Opinions are welcome!

Most common opinion about the Optra Magnum is that it is a bit long in the tooth.

[StarScream]

Originally Posted by ganeshram

After 4 -5 months of new car hunting, I think I have finally found my love. And the interesting thing is that she has been around for quite some time now. It is the Optra Magnum. One thing I just loved about this car - Space. And a proven engine. And to top it all, wonderful pricing. And the features I need. The top end sells at close to 11.5 in Bangalore. This is one car that I feel is priced right. The Cruze might be a looker, packs in a lot of gizmos, but ultimately it is smaller than the Optra. And priced at 18 lakhs . Same with the Fluence - 18 lakhs and a 1.5 litre engine - not for me. Lesser said the better about Jetta and the Laura.

Opinions are welcome!

Originally Posted by amitoj

Most common opinion about the Optra Magnum is that it is a bit long in the tooth.

I agree with Amitoj, the Optra is not really an option. I wouldn't replace the Corolla with that.

There are two other ways to lessen the impact of high prices. One is to keep the car for a long time. These things are built for thousands of miles and 10-15 years of trouble-free ownership. Which also the raises the question, if there is nothing wrong with the Corolla and new car prices suck, why not just keep it?

The second, if it's a palatable option, is to buy secondhand. That market has some of the best deals and true prices.

[ganeshram]

Originally Posted by StarScream

There are two other ways to lessen the impact of high prices. One is to keep the car for a long time. These things are built for thousands of miles and 10-15 years of trouble-free ownership. Which also the raises the question, if there is nothing wrong with the Corolla and new car prices suck, why not just keep it?

2 main reasons for selling the Corolla.

1. Soaring petrol prices. The difference of 30 bucks is just too high. Will save at least 5 - 6 K per month by moving to a diesel car. This with Corolla giving a decent mileage of 11-12 in the city.

2. Rumours of new excise duty on diesel cars. If this is actually implemented, it will be an extra burden.

This is where the Optra actually makes sense. I do agree that it is a bit dated. In fact 5 years back when I bought the Corolla, I was about to purchase the Optra, but didnt do so because of the Chevy brand.

[carboy]

Originally Posted by ganeshram

2 main reasons for selling the Corolla.

1. Soaring petrol prices. The difference of 30 bucks is just too high. Will save at least 5 - 6 K per month by moving to a diesel car. This with Corolla giving a decent mileage of 11-12 in the city.

What's the cost difference between what you would get by selling the Corolla and what you would pay for the new car - how many years of saving 5-6K per month on diesel would it take you to get a return on that investment?

[SmartCat]

Originally Posted by ganeshram

It is the Optra Magnum. The top end sells at close to 11.5 in Bangalore. The Cruze might be a looker, packs in a lot of gizmos, but ultimately it is smaller than the Optra. And priced at 18 lakhs . Same with the Fluence - 18 lakhs and a 1.5 litre engine - not for me. Lesser said the better about Jetta and the Laura.

Opinions are welcome!

It's the generation gap

Old gen cars like Optra / Cedia will always offer value for money.

[StarScream]

Originally Posted by carboy

What's the cost difference between what you would get by selling the Corolla and what you would pay for the new car - how many years of saving 5-6K per month on diesel would it take you to get a return on that investment?

My thoughts exactly. We can't discount the cost of the new car. Look at what you're spending upfront to save money at the pump.

The reason the Optra is so cheap is that nobody buys it. I would be worried about spares and parts if one keeps it for 4-5 years.

[vb-saan]

Originally Posted by ganeshram

Opinions are welcome!

Optra is a good car, but this is exact reason for which you started the thread (which subsequently got merged here) – There are takers for an older model, so that the manufacturers continue to create sub-segments and sell old and new models side by side

There are some good ownership reviews of Optra in the forum – from Keyur, Poitive, NoRules etc. Check through those as well.

What car suggestion is a bit OT here, but if you have the budget, I still feel Fluence diesel E4 is a good option. And a real upgrade from the Corolla will be the big D-segment cars.

[Crank]

Originally Posted by Abhinav667

Well, I completely agree with akshay1234. Its all because of the taxes, which perhaps will see a further hike in March.

Come on guys! Why this thread is going backwards? We have discussed this several times in length and breadth in this same thread. It's not the taxation. Its sheer greed!

If you read this thread from post #190 through post #195, it summarizes almost all the questions asked by ganeshram. My post just above that - post #241 summarizes my view.

[ganeshram]

Originally Posted by StarScream

The reason the Optra is so cheap is that nobody buys it. I would be worried about spares and parts if one keeps it for 4-5 years.

I am not sure whether any company will keep selling a car that has no takers. And generally something that sells in higher numbers comes at a lower cost. In fact the Optra sells pretty much the same number as the Fluence(Reference : Jan sales figures in T Bhp). That doesn't prompt Renault to sell it cheaper.

Originally Posted by vb-san

Optra is a good car, but this is exact reason for which you started the thread (which subsequently got merged here) – There are takers for an older model, so that the manufacturers continue to create sub-segments and sell old and new models side by side

In most of the mature markets, replacements come at a marginally higher cost. Only we Indians pay insanely higher amounts for the next generation of a car. Fluidic Verna costs much higher than the previous Verna and the Altis costs at least 30 - 40 % higher than the old Corolla. Cruze supposedly is the next gen Optra(from Wikipedia) but sells at 6 lakhs more.

Why? I think I know the answer. There are still a lot of takers for these cars. As long as people line up in front of showrooms, there is no way car makers will reduce prices. Only solution - The market has to mature. Volumes have to stabilize. Only then will we see prices that make sense.

[drmohitg]

Originally Posted by ganeshram

I am not sure whether any company will keep selling a car that has no takers. And generally something that sells in higher numbers comes at a lower cost. In fact the Optra sells pretty much the same number as the Fluence(Reference : Jan sales figures in T Bhp). That doesn't prompt Renault to sell it cheaper.

The Optra does struggle to sell specially when you consider its specifications on paper. It shouts VFM from all angles with the only disadvantage of being a little too outdated now. The comparison with Fluence is not correct. If GM actually starts selling Optra in the C+/D segment, which most people including owners feel is the original or right segment for it to compete in, then it might not even see the numbers its doing now.
GM needs to do something soon to the Optra unless they are really happy with the current numbers. They have made there brand value and now need to just refresh the interiors a little with some minor exterior changes. It might do wonders for the car. Right now GM is just not doing enough and has a line up that shouts "Confused" and "Lazy" to me with cars like UVA, Aveo and Optra, all good cars but out of sync with the market.

[urajkumar]

Originally Posted by Crank

Come on guys! Why this thread is going backwards? We have discussed this several times in length and breadth in this same thread. It's not the taxation. Its sheer greed!

If you read this thread from post #190 through post #195, it summarizes almost all the questions asked by ganeshram. My post just above that - post #241 summarizes my view.

When we compare the car prices outside of india, it does seem to indicate sheer greed of the auto companies in India but i must add couple of points to consider before making conclusions.

1) Cars assembled in India still import a lot of components &parts which contribute to higher costs due to Transport (Air/Shipping) and of course tax
2) The cost of the car also includes the cost of development and initial setting-up cost which is split against the expected volumes - since volumes are less, the percentage of devepolment cost in higher (like the XUV for example) in all our cars
3) The million dollor question however is while therotically pricing it lower should result in higher sales, it could also end up re-juggling the numbers across the segments. So a customer buying a Swift could buy the honda city, someone buying the honda City the Civic & so on. But in the end the total sales togeather will only again indicate that our market is still in nascent stage.
4) Finally assuming that all companies are ripping us, why does it not show in thier balance sheet? We dont see indian car makers like TATA, M&M etc having extrordiany profits (thier profits are as comparable to other companies) which indicates that cost of products sold are not over priced as it seems

However in the end of the day as a consumer, when i saw huge SUV, muscle cars and luxury cars as the most common vehicles in (forget developed companie like USA,UK) Dubai, Srilanka () owned by common folks we do of course feel short changed. Hopefully it changes in years to come.