Why are cars so expensive in India?

[Yoda-esque]

The Hyundai Sonata US version has a trim with the following options - 2.4 L Turbocharged 275 BHP engine that goes from 0 to 100 kph in 6 seconds, Panoramic sunroof, dual climate control, Satellite Navigation, Leather Seats, iPod connectivity, Air-con, cruise control, power steering, copious leg-room, disc brakes, keyless entry, power windows etc and guess what you have to pay for this - $31,000. You find me car in India that has all this, but sells for less than 20 lakhs.

You cant find one in India. The US has always been about cars.There too much variety for the buyer to choose from and makers have to keep cutting costs.People here are very knowledgeable about cars and their technicalities. In India,cars are still a prestige thing.The Camry or even a Sonata is marketed and sold as a premium brand in India.Hence , the high cost.

[Desi Cartman]

2-3 years ago we bought I-10 in India for 400k which is around USD 8k. A car with a decent interior, enough tongue, good mileage and supposedly best service. I dont think its bad at all, I mean what else can one expect to get for under 8k including taxes

[surajmal]

2-3 years ago we bought I-10 in India for 400k which is around USD 8k. A car with a decent interior' date=' enough tongue, good mileage and supposedly best service. I dont think its bad at all, I mean what else can one expect to get for under 8k including taxes[/quote'] 8000 dollars is a decent salary for a rookie engineer in India. In North America, a rookie engineer makes an average of 45000 dollars.

[Lurker]

The Hyundai Sonata US version has a trim with the following options - 2.4 L Turbocharged 275 BHP engine that goes from 0 to 100 kph in 6 seconds, Panoramic sunroof, dual climate control, Satellite Navigation, Leather Seats, iPod connectivity, Air-con, cruise control, power steering, copious leg-room, disc brakes, keyless entry, power windows etc and guess what you have to pay for this - $31,000. You find me car in India that has all this, but sells for less than 20 lakhs.

Sriram, Half of that would be useless in India. Satellite navigation or cruise or iPod, or 0-100 in 6 seconds. The bulk of Indians wouldnt care for these. I would say bulk of Europeans also wouldnt care if they have to shell extra cash to get these. 31K is no small matter for a car even in US. The reason why you are getting those features is because its a Hyundai Sonata. If you try to get this on Toyota or Honda the price may go up. Actually maybe not since Hyundai is making a dent in their wallet these days but you get the picture.

[surajmal]

(This applies to North Americans) Never buy a brand new car (unless you are rich). Most cars lose upto half their market value within 3-4 years. So if you are looking to buy a fully loaded camry (pick a 3 year old basic model porsche cayenne instead) or if you are looking at a corolla or a civic, buy a 3-4 year old Infiniti g35 or BMW 3 series. There may be a slight bump in insurance and fuel costs but in the end its worth it (for obvious reasons).

[Clarke]

(This applies to North Americans) Never buy a brand new car (unless you are rich). Most cars lose upto half their market value within 3-4 years. So if you are looking to buy a fully loaded camry (pick a 3 year old basic model porsche cayenne instead) or if you are looking at a corolla or a civic' date=' buy a 3-4 year old Infiniti g35 or BMW 3 series. There may be a slight bump in insurance and fuel costs but in the end its worth it (for obvious reasons).[/quote'] What about the service/repair costs of the Porsche/BMW ? I can guarantee you the biggest car company in Europe might not have a major presence in USA yet but makes more money from parts than car sales. What does that tell you about reliability & spare costs compared to a camry .. BTW any data on the original question ? When you mentioned purchasing power of the rupee as 2.5-3, is that inferred from the nominal vs ppp gdp data (or vice versa) ?

[Ram]

Sriram, Half of that would be useless in India. Satellite navigation or cruise or iPod, or 0-100 in 6 seconds. The bulk of Indians wouldnt care for these. I would say bulk of Europeans also wouldnt care if they have to shell extra cash to get these. 31K is no small matter for a car even in US. The reason why you are getting those features is because its a Hyundai Sonata. If you try to get this on Toyota or Honda the price may go up. Actually maybe not since Hyundai is making a dent in their wallet these days but you get the picture.

Lurks - its not a question of whether we need it or not. Its a question of whether Indian consumers get a bang that is loud enough to justify the buck. When I am buying a refrigdgerator, I will buy a 2 door, frost-free one over the single door basic one if they are equally priced, whether i need the 2-door or not. And as Yoda-eque points out, they are marketing Corollas and Camrys as the 'luxury' segments in India. That is how much international (and to an extent domestic) car-makers have taken us for granted. I hate how Indian consumers are treated like we just came out of a cave and the car-makers feel as though we wil be satisfied by any bread-crumbs they throw us. I will give you a classic example of the differential treatment. Remember, sometime around the mid-2000s, Tata Indica was sold in the UK under the 'Rover' brandname? (The car was called the city Rover). Tata did not choose to simply ship Indian made Indicas to the UK, put the rover badge on and sell it in the Uk. They gave the car a completely revamp - It had a more powerful engine, better interior and a lot of more optional extras. What does that tell you? To me, it sounds like the car-makers know that the consumers in the West wont take garbage products, but its ok to sell anything to the Indians (of course, the city rover was a spectacular failure.. but thats different story..) Of course, I understand that the West is a more mature car market and people expect more. Fine - sell us basic, no frills cars, but dont make us pay the 2 ends of the earth for it. when an Indian family pays 4,5 even 6 lakhs for the entry level compact cars, they should get a REALLY good product, not the metal box with 4 wheels that is sold to them today. However, if the consumer wants his car just to move around, then thats his choice and he should only pay accordingly. And I really do think by making selling Nanos for just over a lakh, the Tatas have inadvertantly proven what a basic small car with no-frills should really cost in India.

[Desi Cartman]

What about the service/repair costs of the Porsche/BMW ? I can guarantee you the biggest car company in Europe might not have a major presence in USA yet but makes more money from parts than car sales. What does that tell you about reliability & spare costs compared to a camry .. BTW any data on the original question ? When you mentioned purchasing power of the rupee as 2.5-3, is that inferred from the nominal vs ppp gdp data (or vice versa) ?

Took my brother's near new infinti G37 for a quick oil change and they charged 60 bucks and washed the car , checked the air pressure etc. Its very competitive and they cant afford to rip off their customers as they will move to another provider.

[Desi Cartman]

8000 dollars is a decent salary for a rookie engineer in India. In North America' date=' a rookie engineer makes an average of 45000 dollars.[/quote'] I am saying that the price is similar here (US) as well. I saw swift being sold for 17k in Aus last year which is around Rs 850k. So where are the Indians getting ripped off in the small car segment ? As far as salaries are concerned, well if one doesnt afford a swift then maybe he should get a used i10. We ourselves couldnt justify buying Swift over i10 for my father as he wont drive much and meets all the requirements and is cheaper but I cant say that swift is ripping people off as its more expensive.

[Yoda-esque]

Took my brother's near new infinti G37 for a quick oil change and they charged 60 bucks and washed the car ' date=' checked the air pressure etc. Its very competitive and they cant afford to rip off their customers as they will move to another provider.[/quote'] 60 bucks? Thats expensive even with the wash. You can change oil on your own for free :winky: On an unrelated note,The Hyundai Hybrid is an absolute beauty. Hyundai and Kia are the new Toyota and Honda....5 years more.

[Holysmoke]

The Hyundai Sonata US version has a trim with the following options - 2.4 L Turbocharged 275 BHP engine that goes from 0 to 100 kph in 6 seconds, Panoramic sunroof, dual climate control, Satellite Navigation, Leather Seats, iPod connectivity, Air-con, cruise control, power steering, copious leg-room, disc brakes, keyless entry, power windows etc and guess what you have to pay for this - $31,000. You find me car in India that has all this, but sells for less than 20 lakhs.

First of all, the sonata is a 2L turbo engine. The 2.4 liter is not a turbo. Anyways. Let me tell you about this car. 275 BHP - Such horsepower is not needed in india. But this car as a similar amount of torque. (365 nm vs 320 nm) Panoramic sunroof - useless in india. What you need is tinted windows. dual climate control - check Satellite Navigation, - check Leather Seats, - check iPod connectivity, - check Air-con, - dual air con. Not dual zone. 2 damn friggin AC's. (seriously) cruise control, - check power steering, - check copious leg-room, - check disc brakes,- check keyless entry,- check power windows - check additional features 4x4 drivetrain reverse camera HID headlamps large ground clearance 6 inch lcd screen etc How much do you think this car would cost? Hint - It's lesser than the sonata, even if you straight convert usd to inr.

[Desi Cartman]

Lurks - its not a question of whether we need it or not. Its a question of whether Indian consumers get a bang that is loud enough to justify the buck. When I am buying a refrigdgerator, I will buy a 2 door, frost-free one over the single door basic one if they are equally priced, whether i need the 2-door or not. And as Yoda-eque points out, they are marketing Corollas and Camrys as the 'luxury' segments in India. That is how much international (and to an extent domestic) car-makers have taken us for granted. I hate how Indian consumers are treated like we just came out of a cave and the car-makers feel as though we wil be satisfied by any bread-crumbs they throw us. I will give you a classic example of the differential treatment. Remember, sometime around the mid-2000s, Tata Indica was sold in the UK under the 'Rover' brandname? (The car was called the city Rover). Tata did not choose to simply ship Indian made Indicas to the UK, put the rover badge on and sell it in the Uk. They gave the car a completely revamp - It had a more powerful engine, better interior and a lot of more optional extras. What does that tell you? To me, it sounds like the car-makers know that the consumers in the West wont take garbage products, but its ok to sell anything to the Indians (of course, the city rover was a spectacular failure.. but thats different story..) Of course, I understand that the West is a more mature car market and people expect more. Fine - sell us basic, no frills cars, but dont make us pay the 2 ends of the earth for it. when an Indian family pays 4,5 even 6 lakhs for the entry level compact cars, they should get a REALLY good product, not the metal box with 4 wheels that is sold to them today. However, if the consumer wants his car just to move around, then thats his choice and he should only pay accordingly. And I really do think by making selling Nanos for just over a lakh, the Tatas have inadvertantly proven what a basic small car with no-frills should really cost in India.

Was the price of Indica in India same as the one they sold in the UK ? I saw Indicas mostly being used as taxis as they were cheap and could run on diesel. As for paying 4-6 lakhs for an Indian family, firstly there are cheaper options like Marutis secondly the price is not much different to what it is overseas in small cars. I cant find a good new small car for a price which is much less than what one expects to pay in India.

[Ram]

First of all, the sonata is a 2L turbo engine. The 2.4 liter is not a turbo. Anyways. Let me tell you about this car. 275 BHP - Such horsepower is not needed in india. But this car as a similar amount of torque. (365 nm vs 320 nm) Panoramic sunroof - useless in india. What you need is tinted windows. dual climate control - check Satellite Navigation, - check Leather Seats, - check iPod connectivity, - check Air-con, - dual air con. Not dual zone. 2 damn friggin AC's. (seriously) cruise control, - check power steering, - check copious leg-room, - check disc brakes,- check keyless entry,- check power windows - check additional features 4x4 drivetrain reverse camera HID headlamps large ground clearance 6 inch lcd screen etc How much do you think this car would cost? Hint - It's lesser than the sonata, even if you straight convert usd to inr.

You left out the most significant portion of the car in terms of pricing (its engine), but want to do a comparison on the other interior and the add-ons? And i dont buy this 'useless in India' theory... what sort of statement is that? Give me my panoramic sunroof.. I will decide whether i want to use it or not.. You(car-maker) cannot tell me 'Oh well, it wont be useful in India, so we are not putting it..'.

[Yoda-esque]

First of all, the sonata is a 2L turbo engine. The 2.4 liter is not a turbo. Anyways. Let me tell you about this car. 275 BHP - Such horsepower is not needed in india. But this car as a similar amount of torque. (365 nm vs 320 nm) Panoramic sunroof - useless in india. What you need is tinted windows. dual climate control - check Satellite Navigation, - check Leather Seats, - check iPod connectivity, - check Air-con, - dual air con. Not dual zone. 2 damn friggin AC's. (seriously) cruise control, - check power steering, - check copious leg-room, - check disc brakes,- check keyless entry,- check power windows - check additional features 4x4 drivetrain reverse camera HID headlamps large ground clearance 6 inch lcd screen etc How much do you think this car would cost? Hint - It's lesser than the sonata, even if you straight convert usd to inr.

That is car with some awesome specs :hatsoff:..I think the only car you might get in the USA at sub $35K with those specs is the Subaru WRX STI.

[Holysmoke]

See, the problem here arises when the NRI's start comparing the market with USA. If you compare with other markets such as aus, uk, germany, etc then the prices seem OK. You guys gotta realize that the USA is a very very skewed market. The prices that you get in the US, you dont get anywhere else. That is because of the volumes the US market can offer. And mind you, the US is not the latest in terms of tech.

[Desi Cartman]

here is maruti sx4 http://www.suzukiauto.com/build_and_price/sx4_sportback it will cost at least 19k in California and is priced at 700k INR in India so its actually cheaper in India, although I havent looked at all the features and even if say its not auto - doesnt have power windows even then its at the worst same price.

[Holysmoke]

You left out the most significant portion of the car in terms of pricing (its engine), but want to do a comparison on the other interior and the add-ons? And i dont buy this 'useless in India' theory... what sort of statement is that? Give me my panoramic sunroof.. I will decide whether i want to use it or not.. You(car-maker) cannot tell me 'Oh well, it wont be useful in India, so we are not putting it..'.

Ofcourse I can do that. Look boss, India is an extremely price sensitive market. If you are going to put in a sunroof and the price of the car goes up by 50,000 rs because of that, people will not appreciate it. I have a sunroof in my car, and I NEVER use it. Infact, I dont know anyone out here who uses a sunroof. Doesnt make sense for the automaker to put in a sunroof and have their car priced above the competition, does it? Wont sell. Why? Sunroof.

[Desi Cartman]

60 bucks? Thats expensive even with the wash. You can change oil on your own for free :winky: On an unrelated note,The Hyundai Hybrid is an absolute beauty. Hyundai and Kia are the new Toyota and Honda....5 years more.

Well the check engine light was on so I had to take it to the garage anyway :winky: and in Aus it would cost at least 150 bucks for the same . I am thinking of getting a new Kia .. but kya smaaj mujhay kia ke saath apnayga ... kya mere dost mujhay samjhaingay ...

[Ram]

Was the price of Indica in India same as the one they sold in the UK ? I saw Indicas mostly being used as taxis as they were cheap and could run on diesel. As for paying 4-6 lakhs for an Indian family, firstly there are cheaper options like Marutis secondly the price is not much different to what it is overseas in small cars. I cant find a good new small car for a price which is much less than what one expects to pay in India.

The City Rover was sold for 6000 pounds in the UK. For arguments' sake, let say the 'luxury' trim of the Indica in 2005 sold for 3 lakh rupees. I know doing a straight currency conversion does not make much sense, but 6000 pounds rought translates to 4.8 lakhs (assuming a ruppe-pound conversion rate of 80) So in terms of absolute value, car that was sold in the U.K was roughly 1.5 times more expensive than the one sold in India. And whats the comparison of purchasing power b/w the Indian consumer and the UK consumer? 1:26! So you price the car 1.5 times for a consumer whose absolute purchasing (in terms of per capita) is 26 times of the other (Indian) consumer. That is my central point - I am not saying cars are too cheap abroad. I am saying they are simply too expensive in India.

[Yoda-esque]

Well the check engine light was on so I had to take it to the garage anyway :winky: I am thinking of getting a new Kia .. but kya smaaj mujhay kia ke saath apnayga ... kya mere dost mujhay samjhaingay ...

The new Kia Optima blows Toyota and Honda right out of the water. It is designed by the same guy that was Audi's lead designer and has won all of the European design awards in its segment this year. People will love your Kia when they see it. The elephant in the room ? Depreciation.