Cheap labour but cars expensive in India

The cheapest labour in the world is India, salaries are very low compared to USA, UK, europe, Australia, New zealand, china or Japan, but cars are sold very expensive than the countries above.

Any reason behind that, I know the reason which everyone knows the TAXES & DUTIES or what not put up by government to be borne by the customer. where does this money go no citizens knows. No transparency atall.

When we elect a government that means the government should adhere to citizens of India, we citizens expect the government to be "for the people, by the people, & with the people".

But nothing looks changed after independence You can say citizens are "For the government, by the government & with the government".

I guess what we get charged is the money spent by the company on R&D of the cars like crash tests, new technology invention etc. Also even though labour is cheap, raw material like steel is costly. This is making the cars very expensive.

But how comparitively our Indian made cars more technologically ahead of other western countries.

As you know Hyundai cars like i10 and i20 are manufactured in India for European market because its cheaper to build it in India.

And dont the other countries mentioned dont do crash tests or R&D. As Indian crash testing is followed by European crash testing, and so even the Emission norms.

Coming to steel most of the westen countries purchase Iron n steel from India and cheap markets in Asia. So does steel become expensive for us.

Yes I agree even companies making good amount of fortune on Indian customers but dont government charge life tax on us.

Im really with the toll tax, Im ready to pay toll for providing good 4 way road, which in turn I can make it on mileage and wear n tear of the vehicle not with many bumps damaging my vehicle.

And coming to the fuel prices what kind system do we follow

Petrol prices in different countries

US Rs 34 per liter

India Rs 55 per liter

Pakistan Rs 38 per liter

Europe Rs 60 per liter, per capita income of Europe is much higher compared to India.

I doubt if any major technology development happens in India in the first place. Most of the times the R&D departments are in the base locations of countries and only the manufacturing hubs are in India. 

Manufacturing in India and exporting to Europe is feasible because the duty would be considerably less in Europe than in India.

All countries do follow crash tests and the cars are priced accordingly in each of the markets. Even the cars are designed according to local market taste for e.g. the SX4 is a sedan in India while in Europe it is not. The i20 (5 door version) starts from approximately 8.8 lacs (£11,000 * 80) onwards in UK while in India it starts from 4.55 lacs (almost half of the price in UK). So you can see the difference there. 

Unfortunately I am not sure about steel becoming expensive for us based on the exports. 

Petrol rates depend on the subsidy offered by the Gov. US is the wealthiest nation in the world and does not have any problem in subsidising the rates for fuel but India does have issues. So we cannot do a direct comparison there. 

On the contrary to your statement I feel that buying a car in India is very cheap but it is the cost of owing one that is a killer because of the increasing fuel costs.

Rite said Bro

But as in US the oil prices vary daily depending on the crude oil market varies. Fuel is not controlled by the GOV but by the oil firms in US.

That is what Indian government done with Petrol, Now petrol will be completely run by the oil firms, when crude oil increases petrol will increase but when the crude decreases petrol prices decrease.

Now as Indian gov has set  petrol price to Rs 55 a litre at current market crude oil $77 per barrel, just can imagine if it goes to $100 a barrel.

But Diesel is controlled by government so prices of diesel depends on the government if they want to decrease they can, same if they want to increase they can.

Thanks that I have chosen to get a diesel car.

UK is also a wealthiest country, they per capita income is way ahead than ours. So how can we compare it with UK when we are not comparing it with US.

And about the pricing the western countries set some standards like AIRBAGS, ABS mandatory in even the basic version which here i20 with airbags and abs is almost the same, I doubt they approve a car without airbags. whereas the rs4.55 car has no safety features like airbags and abs, so how can we compare that basic to highend version.

Yes even a honda civic looks tiny comapred to cars in US but here its a sedan.

MOD EDIT: Please do not quote immediately preceding post (not necessary). Hence Removed.

you seem to be confused here. Initially you mentioned about cars being crash tested in all the places and that is the reason I mentioned about the i20 in UK markets. Europe tests the cars with airbags and all those features and the crash tests do become expensive because of the all the airbags and stuff. Even if you consider the high end completely loaded model of i20 in India and the base model of i20 in UK, the price difference is still of around 2-2.5 lacs between the two. So even we go your way, cars are still cheaper in India. 

When I say we cannot compare with US I mean only for the fuel costs and not the car prices.

Government would be controlling the diesel prices because if they do not do it the cost of all the goods will go up as the transportation of goods is done in trucks (run on diesel) which would pinch the common man very badly. Petrol is mostly used in cars and bikes and would not directly affect a person who does not own any of these. So that is the difference.

Sridhar,

Actually I dont get it that you think im confused but you dint get what I said. forget that part and compare the price list of UK to India prices for i20. And for your kind info 1 pound is Rs70 not Rs80

Please go through the link of UK hyundai i20 price list and also do have a look on the features compared to Indian i20

http://www.hyundai.co.uk/newCars/i20/prices/

This is what the prices in UK multiplied pound with rupees and these are on road prices

Petrol version

1. Classic 1.2 3dr - £9220 * 70 = Rs645400
2. Classic 1.2 5dr - £9680 * 70 = Rs677600
3. Comfort 1.2 3dr - £10040*70 = Rs702800
4. Comfort 1.2 5dr - £10500*70 = Rs735000
5. Comfort 1.4 3dr - £10660*70 = Rs746200
6. Comfort 1.4 5dr - £11120*70 = Rs778400
7. Comfort 1.4 5dr Auto -£12050*70 = Rs843500

Diesel version

1. Comfort 1.4 CRDi 75PS 3dr - £11145*70 = Rs780150
2. Comfort 1.4 CRDi 75PS 5dr - £11605*70 = Rs812350
3. Style 1.4 5dr - £12050*70 = Rs843500
4. Style 1.4 CRDi 90PS 5dr - £13035*70 = Rs912450

Indian i20 on road prices for each model

petrol version in rupees

1. Era - 533990
2. Magna - 580645
3. Sportz option - 609870
4. Sportz - 627370
5. Asta - 675845
6. Asta SR (O) - 728365
7. Asta AT 1.4 - 879970

Diesel version in Rupees

1. 1.4L Era - 675600
2. 1.4L Magna - 722455
3. 1.4L Sportz Option - 751725
4. 1.4L Sportz - 768940
5. 1.4 Magna with ABS - 817880
6. 1.4L Asta - 817880
7. 1.4L Asta (O) SR - 864690

So UK basic which starts from Rs645400 which got 6 airbags with 15", driver seat adjustment compared to Indian version Asta petrol Rs675845 and many more features in the UK basic model.

645400 - 675845 = -30445.

And the topend diesel model in Uk is priced Rs 912450 compared to Indian highend Diesel model Rs 864690.

912450 - 864690 = 47760

Comparitively UK i20 got more features in their versions. Sridhar they have almost same pricing as our but ya I agree that in india i20 start with 533990 with dont even meet safety standards.

Its like purchase an Era and feel like Asta model lol. Some people  thing Whats the difference betwen Era and Asta both are i20.

Please dont get confused.

you seem to have been offended by what I said. I dnt intend to offend you in the first place. 

Secondly right now the currency exchange rate for the pound is Rs.70 but it varies from Rs 65 to 85 and for a major time in a year it hovers around 78-80 and so I took it around 80. You could verify that if you wish.

Thirdly you cannot compare the price of a 3dr to the price of a 5dr. The cost of the base 5dr is 774400. I agree to making a mistake of not noticing the base model of £9680 and hence I got the huge price difference but still it would not be way lower considering the price of £9680. The on-road price for cars in India varies from city to city and it would not be appropriate to take any one city and do the calculations but it would still work out approximately between 1-1.5 lacs on an average. The customer in Europe/UK do not have a choice of opting for a car without airbags because European norms require these safety features in them while in India you could still go for a non airbag version which is way cheaper and this is what I mentioned about the R&D earlier as well. Given an option maybe Europeans might also want to go ahead with no airbags but the do not have a choice at all. So if they buy an I20 they pay a minimum of £9650. Now consider the fact that these cars are manufactured in India and exported to Europe and still they are not so expensive in Europe. It is because these cars are manufactured in India that we are getting it at these rates. Had these cars been manufactured in Europe and exported to India do you think we would have go it at the same price? No way at all. In spite of being imports in Europe these cars are not that costly. I hope I am clear now.

Finally coming to aspect of safety in our cars. If you actually see the Indian market very few people are bothered about safety. If a person has the budget for a fully loaded i20, he wouldnt purchase it. On the contrary he would prefer a low end model of a sedan at the same price. If Indian manufacturers start only making cars with these safety features the prices would go up which would chicken out people from buying them. If you mention to a guy willing to buy a car with airbags that he would have to change the airbags every 5-6 years and each airbag would cost 35k he would give a smirk and walk off the showroom but in Europe they would make sure to change it as and when required. So we cannot blame the car manufacturers at all. It is a question of mentality which is beyond comparison.

Nice to see a healthy discussion going on here. We have probably discussed it here - India has a high customs duty for importation of CBUs. This makes Indian car manufacturers complacent, as they are protected from ruthless competition.

This wes ok when the manufacturers were Indian and the competition was foreign. Now the situation is we are ending up protecting GM, Ford Suzuki, Hyundai etc. from other foreign players. This is absurd, and unless customs duty on CBUs reduces, we will be seeing the combined ripoff by the mfrs and Govt. of the hapless car buyer.

The UK comparison kind of comes close to Indian prices, there is only a minor difference in the model comparisons. I did a comparison on prices some time ago, and A Prius was sold in the US market somewhere around $23k, and Imported Honda Civic Hybrid was being sold in the indian market at a sticker price INR equivalent of $43k. Talk about the HUGE ripoff!

Yes Krish,

Importing cars one have to pay atleast 100% on custom duties

and importing bikes one have to pay atleast 140% on custom duties.

Why are these duties a huge burden on the customer if one has to import when UK and europe import cars from India get the price as as we in India have.

Take an eg - Honda price start from around $17000 OTR thats around Rs 800000, and a Hybrid civic $25000 OTR thats around Rs1150000 in US.

Where as civic hybrid in UK cost Rs1300000 & topend cost Rs 1500000,

As same of the BMW 3 series diesel in UK check the link

http://www.bmw.co.uk/bmwuk/pricesandspecifications/0,,1156___bs-Mw%3D%3D%40bb-TEkwOA%3D%3D%40sit-bmwuk,00.html#Z3ED

The base model 320d cost £27245 thats around Rs1900000, and the top end 335d diesel cost £38025 thats around Rs2700000.

Now Sri dont tell me US is a rich country that is why they have that prices etc.

I never heard in US gov giving subsidy for anything, except for the poor, and why is rich country have so less prices, are they short of money are rich countries not capable of paying huge price like us, when we can afford.

Comparing the roads in west they are less bumpy actually no bumps well maintained no body digs the road without permission and if they do they have to level it before they leave, as far as in India my street where I stay has been digged more than a year but no one has turned up to dambar the road. And I have paid the road life tax to get a nice clean road as one in front of my house, gravel coming out which is damaging my new vehicle.

Everything is taken for granted in India.