Are cars in India today overpriced

A lot of these cars have heavy localisation involved and could I never understand the rationale behind the pricing.

BHPian thiagust recently shared this with other enthusiasts.

I have been looking for an upgrade on my GT TSI 2013 model and have been blown away by the recent pricing trends in the Indian auto scene. For instance, a Hyundai Alcazar priced at Rs 17 Lakh (ex-showroom) and Skoda Kushaq at the same price range. A lot of these cars have heavy localisation involved and could never understand the rationale behind the pricing. For instance Hyundai has literally the same engine in different states-of-tune (I could be wrong though). How is the pricing even justified? When I bought by TSI in 2013, the DSG and the TSI engine - both were imported and hence the pricing was 9.3 lakh (on-road).

Can my fellow BHPians throw some light? I have shelved my plans for an upgrade (was planning to go for a compact / mid-size SUV, with a proper AT).

Here's what BHPian nitkel had to say on the matter:

Fact is that car prices have kept pace with inflation, while salaries in most jobs have remained stagnant. Hence, now when people look to upgrade 7 - 10 years down the line they find that one will get roughly the same segment car for 1.5 - 2 times the price, with a few extra, sometimes useless, features thrown in!

Here's what BHPian 2000rpm had to say on the matter:

The Rs 10 lakh cars of yesterday, didn't have so many features which are a standard now:

• Airbags, ABS, EBD, etc., (I think the first gen City, didn't have a single airbag, my Civic 2007, had 2)
• Android Auto and Apple Car play
• Longer warranties
• Rear view camera and sensors
• Automatic wipers and headlights and IRVMs
• Auto folding mirrors
• All 4 power windows
• Sunroof
• Rear AC
• Detailed MID with so much data
• Connected Car tech
• Much better driving dynamics, especially for SUVs (try the first gen Scorpio sometime)

With so many additions, I think it's natural for a Rs 10 lakh city to be at Rs 17 lakh now, especially after factoring in Inflation.

Here's what BHPian YashD had to say on the matter:

It's the taxation which makes the car expensive in India. For example, I just bought the Seltos HTX IVT last year and here is the break up, just for the ex-showroom price:

Price of the Vehicle - Rs 9,88,965

+ GST (28%) - Rs 2,76,910

+ Cess (17%) - Rs 1,68,124

+ TCS (0.75%) - Rs 10,755

Total - Rs 14,44,755

Now, on this you add the remaining charges i.e. registration, insurance etc., and on that too you're paying a certain GST. In the end, when you're buying a car, almost 50% price is paid to the government. So, yes! Indian cars are overpriced drastically but I won't blame the manufacturers here but the government who has been taxing the automotive sector like absolute maniacs!

Here's what GTO had to say on the matter:

Great discussion! Cars are definitely overpriced today. Some more contributors from my end:

• Focus on profits over market-share. You can see this in the pricing of new cars like the Fortuner update, Kushaq, A-Class etc. It's a change of mindset for car manufacturers as market growth numbers in India have slowed down, so why not sell similar numbers at a higher price?
• The chip shortage has restricted supplies. It is truly a seller's market today.
• Lesser competition in the 15+ lakh segments from brands like Maruti, Honda, Toyota etc. This gives the brands behind the Creta, Seltos, Harrier etc. a lot more pricing leeway. How many 25 - 35 lakh sedans are there in the market? Even among large SUVs, the Kodiaq is absent (temporarily), Tiguan is gone and the Alturas G4 is finished which gives players like the Fortuner & Endeavour the freedom to charge whatever they want.

I think there are still many value-for-money cars in the 6 - 13 lakh space due to the sheer competition (primarily from Maruti), but in the segments above that, it's all about fat profits.

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