[Cresterk]

I think everyone here has at one point or another looked at the same models of our cars in foreign markets and ranted about how expensive cars are over here, mainly due to taxes. Mostly we only look at luxury or sports segments, and it's rather hard to live with the knowledge that the money you spent on a 1.5L C class here would have gotten you an amg variant or a well equipped GLE in America. Even the fortuner owner will only generally look at the massive feature loaded SUVs available in America for the same money and feel shortchanged. But we seldom look at the lower end of the market.

https://apnews.com/article/car-auto-...f278dfb120c30d

There is only 1 new car available under 20,000 USD in America now. It's the Mitsubishi Mirage, a model that was introduced all the way back in 2012 and is at the risk of being phased out today. It's a hatchback that is slightly smaller than the Maruti-Suzuki Swift, has a 3 cylinder engine that churns out 76 horsepower and provides 39 MPG ( about 16.5 kmpl).

It is also selling for a ridiculous $19,205. ( About 15,94,235 Inr)

We might not have many options in the higher segments but we do have plenty of options available for 16L. We have everything from:

1. Capable 4x4s such as the Thar and Jimny.

2. Safe and fun to drive sedans such as VW virtus, the Skoda Slavia or the Honda City.

3. Feature loaded crossovers from Hyundai/Kia and even Maruti etc

4. Fully electric cars from Tata such as the Tiago or Nexon EV.

5. Even some 7 seaters such as the Kia Carens

All of these might not be the fully loaded trims but this is not even counting many of the cars which are priced even lower!

Yes, the cars sold in America also have stricter standards to comply to but is that enough to make you pick a Mitsubishi Mirage over any of these? We still have a long way to go but we have also come quite a long way. Just a bit of context

[WorkingGuru]

That's because anyone spending about ~$20k-$25k is likely to buy through the pre-owned car route. The market for pre-owned is HUGE since their developed market has been producing and selling well made good cars since 30 years at significant volumes - and a very large number of those still run well thanks to the infrastructure and widespread rich ecosystem of repairability.

Just check and compare prices upwards the D Segment with those sold in India, and you'll see that there's a lot less to be happy about.

But EoD I do agree that low cost cars have democratised mobility like never before in India. Having products like the WagonR, or the Triber really changes the quality of life here.

[Samfromindia]

Back in the days I believe Chevy Spark (Beat) & Ford Ecosport were entry level options from both the stables. All are discontinued now I guess.

[mobike008]

Originally Posted by Cresterk

Yes, the cars sold in America also have stricter standards to comply to but is that enough to make you pick a Mitsubishi Mirage over any of these? We still have a long way to go but we have also come quite a long way. Just a bit of context

Nice reverse outlook. We always think that grass is greener on the other side.

At the end of the day, it's almost the same as cost of a car and it's affordability is directly proportional to one's income.

For some, $20K car is expensive while some can easily afford a $75K car in the US.

Car prices in the US like everywhere in the world have exponentially increased. But, the demand for both new and preowned cars is still high.

I remember going through the process of buying a Toyota Corolla S (Supposed to be the most basic car here in US) for my niece back in January, 2021.

It costed a whopping $27K. It surprised the living daylights out of me.

Take this into perspective as well. I had bought a top-end model of a much luxurious vehicle- Mazda 6 in 2015 for $24K.

So yeah, prices of car have increased quite a bit but, so has the income of people.

[adi_gt]

Just bought a Subaru Outback 2024 base model at $33k CAD in Montreal ( OTR $42k). I feel its quite VFM considering the car we get in 25lakh range in India. Base model itself is quite loaded and only missing out on some luxuries which only improves the feel good factor but the functionality and requirements are met by it. It's an AWD like all Subarus and with 2.5L NA Boxer engine. Handling is more like a car than a cross over but yeah it's not a great curve loving sedan for sure but gets the job done under heavy snow etc.

And just to add considering the long wait times for all popular cars like Mazda CX-5, RAV4 in the same segment + Old used cars being sold at roughly the same price as a new car without much depreciation in Canada the market you can imagine is quite hot due to the world wide supply chain issues. Car makers and dealers are making a killing.

[Cresterk]

Originally Posted by WorkingGuru

That's because anyone spending about ~$20k-$25k is likely to buy through the pre-owned car route. The market for pre-owned is HUGE since their developed market has been producing and selling well made good cars since 30 years at significant volumes - and a very large number of those still run well thanks to the infrastructure and widespread rich ecosystem of repairability.

If no one buys new cars, there won't be any pre-owned cars. Pre-owned cars also don't have warranties, nor do they offer decent finance rates, which is the main thing going for new cars. There is only so long cars can change owners and unless they are rare or expensive models, tend to be neglected by the time it's on its 4th owner.

Just check and compare prices upwards the D Segment with those sold in India, and you'll see that there's a lot less to be happy about.

But EoD I do agree that low cost cars have democratised mobility like never before in India. Having products like the WagonR, or the Triber really changes the quality of life here.

I have already talked about the situation being quite different when you go higher up the segments. I think that is something most people already know about. It's just that no one bothers to check the lowest segments because not many people dream of going to a foreign land and buying their cheapest car so I decided to provide some perspective.

It doesn't even have to be a barebones WagonR or Triber, I have provided examples of decently loaded cars from a higher segment that would still be a better buy

[inwester]

I think I've said this earlier somewhere in the forum. One of the cheapest places you can buy a car in the world is in India.

However, that only applies in the smaller cars made in India and/or specifically for the developing market. Any other product above that range, the taxes and duties will kill it. You can check the actual factory invoice of any car and you will see the price. It will basically be 50-60% of what you pay on-road in places like Kerala or Karnataka, i.e. 50 lakh OTR car will roughly be around 26-29 lakhs factory invoice.

Average new car price (selling or transaction price) in the US over the last 30 years -

1990 - $15,000
2000 - $21,000
2010 - $25,000
2022 - $50,000!!

It has dramatically increased in the last 5 years.

If I remember correctly, there was never really a car cheaper than $10k in the US, not in the 2 plus decades I've lived here. I think it was always Nissan Versa (basically a Honda City size), which I think still might be the cheapest car to buy here. And that was the base model just for marketing purposes, which reasonably equipped came to around $15k. Now that has moved to $15-20k, which is not bad in 20 years.

https://www.nissanusa.com/vehicles/c...rsa-sedan.html

Cars are not really a status symbol in the US (except in the very exclusive range, supercars etc.), everyone owns one or two or three, and nowadays, everyone owns a fancy one, especially when the average selling price is around the annual median household income after taxes.

[Mystic]

In USA, very few really buy new cars with cash. Many donot care to know the price changes. American automotive industry makes sure that made in USA cars would automatically shut down after few years and display “Game Over” in dash board (pun intended) and force you to buy a new car. This perception changed in the last 2 decades and now American cars are equally long lasting like Japanese cars.

When I was new to USA, I asked one Desi guy which car to buy he said Hindu (sorry Honda) Accord or Camry. These 2 are defaults for all Desis. They use it for 5 years and return to dealer and get a newer version of same car. This cycle goes on for ever with EMIs. Many don’t even know the prices.

During my consulting career in USA, I was forced to get a rental car every week for decades. This becomes such routine that I sometimes forget the colour of the car and model I am driving and I have to struggle to recognise my rental car every week in parking lots. This is exact the opposite when I look forward to seeing my personal car in San Jose airport (Mercedes). Life is too mechanical sometimes in these advanced countries and there is no time to die or enjoy cars.

[GTO]

Have been reading on Reddit of how new cars have gotten too expensive. And there is data to back it up too. The average transaction price for a new car is now an eye-popping 37-lakh rupees in the USA (46,290 USD)! There are several contributors (Covid effects on the market & supply chain, profits, small cars being dropped in favour of big cars & trucks, SUVs killing sedans, features + safety + new tech, strong demand....)


Source

[Jeroen]

I am not sure where they got their data, but you can still get a new car in the USA for about $17000. That would be MRSP so you should be able to get a discount on that.

https://www.passportnissanmd.com/sea...an&Model=Versa

Cars such as the Mitsubishi Mirage and Kia Rio are both a little more than $17000 too.

Still, a lot of money for a new little car!

Jeroen

[dragracer567]

Originally Posted by Jeroen

I am not sure where they got their data, but you can still get a new car in the USA for about $17000. That would be MRSP so you should be able to get a discount on that.

https://www.passportnissanmd.com/sea...an&Model=Versa

Cars such as the Mitsubishi Mirage and Kia Rio are both a little more than $17000 too.

Still, a lot of money for a new little car!

Jeroen

Exactly, and except for Dacias, it's pretty much the same for the cheapest cars in Europe (based on prices in the UK and Germany)

[DicKy]

Originally Posted by Cresterk

We might not have many options in the higher segments but we do have plenty of options available for 16L. We have everything from:....
.....Yes, the cars sold in America also have stricter standards to comply to but is that enough to make you pick a Mitsubishi Mirage over any of these? We still have a long way to go but we have also come quite a long way. Just a bit of context

Had posted the same in an almost 10 year old thread, and amused that it is still the same today. Just that the price point has moved from 12 lakhs to 16 lakhs.


https://www.team-bhp.com/forum/india...ml#post3483453 (Cars we wish manufacturers would launch in India)

For all of us whining about car prices being high ,did an amateur comparo between the prices in India and the prices in Saudi Arabia(nil taxes, everything from Chinese to Mercs to Cadillacs are sold there).ex showroom.

Under 12 lakhs
India - For us Indians we have a wide range of options under 12 lakhs. Actually this is where we are spoilt for options. From the 2 lakhs Nano to 12 lakhs Xuv500 we have a wide variety of models, body styles and engines.

Saudi Arabia - But whereas in Saudi Arabia the starting price of cars is around 8 lakhs. Sure, we can get a bunch of Indian made hatches(i10, Figo, Beat) and Chinese make hatches for around 5 lakhs, but the vast majority of the popular cars (Toyota Yaris, Verna/Accent) starts from 8 lakhs and the choice of cars in this range is relatively few.

Sure , ours are built to cost, decontented , probably unsafe death trap cars etcetra but given 8 lakhs we have a choice of buying hatches,sedans, small MPVs, full blown MUVs, decades old tech jeeps and pick up trucks.

Over 12 lakhs
India - Luxury car territory in India, but lets look at the choices. Sure, we get the top end versions of every car, but most of them are surely over priced, thanks to the import content in them and the taxes.
Other than a bunch of SUVs and sedans, the higher the prices go the more European it becomes and then it ends in the Holy German trio.

Also the different classes of cars are separated by 10lakhs minimum. Over lapping of models in the same stable is unheard of, not surprising cause we get the high mid/top end versions only.

Saudi Arabia - Now this is where the choices start. For example in the range of 12-25 lakhs one can buy the whole range of Toyota vehicles from the Corolla to the giant Sequoia, barring the mighty Landcruiser. Add two lakhs and you can get the base variant of the LC for 27 lakhs

I used to even think that if the top selling vehicle is not within the list of cheapest ten vehicles in the market, either the country is doing well or there is huge income disparity. But nope. This thread changed my opinion.

https://www.team-bhp.com/forum/inter...aller-car.html (Best selling cars worldwide | The denser the population, the smaller the car)

My theory is that the US market had lots of choices since the automobile was invented and add with that the cheap petrol prices, it made sense to buy used cars which were anyways going cheap. Just imagine if petrol was cheap in India. The Civic/Corolla/Accord/Camry gang would have been hot used car options. It is the fuel economy, more than the maintenance costs that make people hesitant to go the used car route and get satisfied with smaller fuel efficient options. Say, I would wager that most BHPians would agree that a Honda CR-V would be the perfect used family car for India IF it gave 15+km/l. So, other than the Oil crises of the 1970s, Americans never really warmed up to the cheapest small cars. Also regulatory norms for safety post 2000 made even the base prices of small cars go up. Unlike India where non existent safety norms and used market limitations meant entry level hatchbacks could be sold for decades and still be lapped up.

But today, we are improving as well. The cheapest car sold in India is only an year old and the top selling car in India is no longer the cheapest one and with car prices going up, people are attracted to the used car market much more, which is the correct way IMO.

[SoumenD]

In PPP terms, USD 20k == 4.6L INR



Looking at absolute cost is pointless IMO considering average income in India is way lower than the US of A. I feel PPP comparison is a better parameter and if you notice USD 20k is equivalent to 4.6L INR. That’s about the price we pay today for base+1 model of Alto 800.

So I don’t see how are we any better in terms of affordable cars. If anything, the Mitsubishi would be a much better built car compared to Alto due to stricter norms in US of A.

[nicodash]

Originally Posted by SoumenD

I feel PPP comparison is a better parameter and if you notice USD 20k is equivalent to 4.6L INR.

In a globalised world, using purchasing power parity (PPP) as a pricing metric may not be suitable for all goods. While items like potatoes and tomatoes could be valued based on PPP, this approach might not be applicable to products such as electronics and cars. These items involve raw materials sourced from various parts of the globe.

The pricing of materials like steel, chips, displays, etc., is determined by the global dynamics of demand and supply. Even if one were to source all the components locally for car manufacturing, their prices would still be influenced by worldwide demand. For instance, if I were a manufacturer/vendor supplying screens for car dashboards, I would cater to the company offering better prices, whether it's Maruti in India or Ford in the USA (assuming the quality requirements for the screens are identical). Consequently, my prices would become aligned with global prices.

A car that costs 10 lakhs to produce in the USA might be manufactured for 7-8 lakhs in India, attributed to reduced labor costs and relatively lower prices of many raw materials. However, the variance wouldn't be as substantial as the 4X differential that PPP might indicate. Add on the 25-50% tax that government imposes, and a car of same quality should cost more in India than USA.

The rationale behind the availability of more affordable cars in India under Rs 20 Lakh doesn't stem from PPP or solely from cost-effective manufacturing in the country. Rather, it's primarily a consequence of our affordable cars generally being of lower quality.

[Hayek]

Think it is simply a function of the fact that a you can get a 2020 Toyota Camry for USD 17 k - and almost no one would pick a new Honda City over a 3 year old Camry.

My brother in law bought a 3 year old Acura in 2012 - he is a real car geek, so it may not apply to everyone - but if you look at it today (14 years and about 200000 miles done), it still seems better than most 2-3 year old cars in India.

Why? Because there is less dust, roads are better and risk of fender benders is lower in the USA than in India .

Yes, we have a large demand for unsafe, cheap cars - which creates scale in that segment and makes us the most competitive location to make such products. They have a massive demand for mid sized and large cross overs, and hence those products are cheaper to make in the USA.