Indian Car Prices

Indian Car Prices

by

Mamta Papneja

In a country like India listening to phrases like ‘yet another car price hike?’ is quite common. Car makers come with excuses like the annual Indian Union Budget, rise in raw material prices, greater labour costs and a whole lot of reasons for increase in car prices. Indians sometimes tend to wonder if cars are really that expensive, or, are the prices hyped up for no reason. In this article, you may read about the rising car prices in India.

Each time the car prices rise in India there’s a little drama and then everyone nods his/her head and gets back to work. Nobody is too bothered as, unlike in the U.S., most Indians buy cars just once in a lifetime. They invest in a car if they have the money and are happy to ride a two-wheeler if they cannot afford a car. So, there’s no one who really wants to take pain and fight it out. The new Bharat Stage emission norms came into effect in April this year, and the car prices in India went up once again. The reason that car makers cited was that the revamped engines would be priced higher. Why are the car prices low elsewhere and high in India? No wonder other nations have more than one car per household while most Indian families struggle to have one in their car porch. In seven months, January-July 2010 India will be facing the fourth price hike. Auto makers blame the rising costs of raw materials that have shot through the roof. They say that it becomes inevitable for them to pass on the production costs to the consumers. But yes, Indians need to understand that car makers are not the supreme monsters. Auto makers like M&M, GM, Ford, Toyota and Maruti Suzuki try their best negotiating with vendors to keep the rise in prices minimum. The costs of raw materials like steel and rubber that are needed for car production have gone high and Indians need to understand that the automobile manufacturers’ hands are also tied. Fortunately, the recent price hikes has not affected car sales. But, who knows, the new cars may have found a higher number of buyers had the costs been low. The world’s cheapest car had come with a tag of Rs. 1 Lakh and everyone was happy. As promised, the first batch of vehicles was rolled out with the same price tag. However, increase in commodity prices has left Tata Motors with no other option and the prices of the Tata Nano too will soon increase. The competition is getting tougher and the only way the auto companies can capture the Indian market would be by bringing low-cost models on to the Indian roads.

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