Car price in India

I would like to add here that in countries like US/UK/JAPAN which are big in demand size, most of the big manufacturers have invested quite a bit in setting up automated car assembly units. These robotized assembly lines bring down the manufacturing costs to some extent. Also the insurance prices of vehicles are pretty high in these countries.

In India, though we have cheaper labour, i donot think the manufacturers would be able to give cars at the same prices at which they retail their cars outside India in US/UK etc. We do not have the size of demand like these countries have.

Having said that i definitely agree that the cars are still overpriced. Ofcourse the consolation is that in India, we could get repairs done at affordable prices. Although good mechanics are few & far.

Hi Bhushan, First, thanks for the reply.

I agree with your basic statement that volumes drive economics. However the difference is not enough to cause such an increase. For example a typical BIW (steel Body) may cost around $800 to $1000.0 for a volume of 100000 vehicles. For a much smaller volume the price may increase a max by 15%. The cost of automation will actually go down since you can do a lot of manual process. However the cost of tools and dies are now amortized over a much smaller volume and so will go up.

For most of the foriegn cars being sold in india, allready base volumes are large and tools and dies are allready plaid for. As such incremental volume for exporting to india will not cost much. Most of the cost increase is in shipping and taxes.

For cars that are global and have small volume in India part assemblies can be shipped and assembled at low cost in India.

As such, I do not buy the argument of cost to manufacturer being a significant part of the pricing. It is all in the govt. applying taxes to protect local companies and make some revenue. Not very different to the days when we had to drink Thums up and Limca and not Coke and Sprite.

 

But Das, I asked many dealers. There are no discounts that Ford is offering. And one of the dealers said that there will be a price hike of 18k in a few days.

Also, tell me if my choice of Fiesta 1.6 petrol is a good one. I heard that it is not giving above 12 kmpl against the company promise of atleast 13-15 in city roads. Could you please help me out on this?

Shiva see the ford site. they are giving some offer i believe. See no dealer wanna give discount simply you need to bargain with them. They has to give some corporate discount too.

If the manufacturing cost is high then why the Hyndai set up a plant in Chennai and exporting many part of the world. If the comp feels that human power is lesser(Cost) than they can always install some robotic automated system in their plant. They are producing a big volume.
If any forein manufacturer sells car in India they save a lots of money on R&D for that particular model. In India Toyota has launched 3-4 model from past 10+ yrs. And at the same time in US/UK... they might have launched 20-30.
In US Ford,GM are lesser priced than the Toyota. Is in India we get Maruti/TATA... in comparatively lesser price than GM/FORD...

Last month I was planning to Buy Fusion+ and they was ready to give 20K discount with all free goodies.
You also can try this car if you want.
I really dont know now about the present offer.

Das, thank you very much for all you said. That will help.
Secondly, it would be great if you can help me out in knowing more about the various taxes. There is some RTO, then VAT, Registration and insurance. I do not know much about RTO thing. Some cars have 30,000 as their RTO and some less[may be around 10,000]. Why this difference? And which cars will have a higher tax and which cars a lower? Das, can you help me out on this?

Hi Shiva this depends on which car you are buying and which state you are from.
As I know in Bangalore road Tax is hieghest (Though You get worst Infrastructure to drive your car ).
It is 10% of your Ex-sh price.

At present I am staying in Gujarat. And, I want to know about RTO here. Firstly, is it true that longer cars have high RTO charges[30,000] and smaller cars have lower[abt. 10,000]? And how often we have to pay these RTO charges? Is it every year? or for how much duration?

The car Size and the Capacity made a factor on the Car Price. If your car is less than 4mt and CC(1200-1400) it comes under Small Car bracket. This has lesser taxed than the Bigger Car. So obviusly the car prices come down.
After that it comes to Road Tax + Insurance. This depends on the ex- show room Price.
I think you need to contact the Local RTO office to know the exact amount.

Hey Das, great reply. But I still have one doubt. Do we have to pay that RTO charges every year? Then why is it call life tax?