By on April 11, 2014

Datsun Go India March 2014. Picture courtesy of What Car? IndiaThe Datsun Go starts at US$5,340. Only in India is such low pricing possible at the moment.

A recent stay in India has enabled me to get a much better understanding of the Indian new car market and its dynamics which have very unique characteristics. Understanding India is essential in today’s worldwide automotive scene – a lot of the innovation taking place here will soon be applied to other developing markets (like Africa).

1. Why India matters

Ever wondered why so many India-exclusive new cars were unveiled at the Delhi Auto Show in February compared to the relative small size of its new car market (3 million units in 2013 vs. 21.9 million for China)? That’s because on top of the enormous growth potential, making and selling cars in India requires a very different set of skills. And the manufacturers that are getting good at it are taking a decisive advantage into succeeding in tomorrow’s developing markets, where cost-cutting will be the most important factor. Many of the techniques being learned in India will come in handy when developing cars for Africa, which is considered the final frontier for automotive growth.

To be successful in India, cars need a price tag so much lower than in most other markets, that new thinking is needed. An Indian trademarked way of innovating that is adapted to local conditions, constraints and revenue levels. The old way of creating low-cost was to engineer down from more sophisticated products by cutting cost through tried-and-tested platforms and economies of scale. The new way is to engineer up from scratch a product that is far cheaper, with a mix of bare bones elements and the latest tech features. Example: the $100 laptop. This process has been dubbed ‘frugal engineering‘ (achieving more with fewer resources) by Carlos Ghosn, or ‘bottom-up innovation’.

Datsun Go What Car March 2014bNo radio and CD player in the Datsun Go

2. Bottom-up innovation at play

Indian manufacturer Tata was the first to bring bottom-up innovation to the car industry with the Nano, ‘the cheapest car in the world’ at US$1,700 when unveiled in 2009. The Nano turned a lot of carmaking conventions on their head. It uses a modular design that theoretically enables a knowledgeable mechanic to assemble the car in a suitable workshop. It also includes numerous lighter components, from simple door handles and bulbs to the transmission and engine parts, enabling a more energy efficient engine. The Nano is one of the shortest four-passenger cars on the market, yet it allows for ample interior space.

These ‘ultra-low cost’ cars can end up being more user-friendly, if sophisticated. One great example: the new Datsun Go does not have a radio or CD player (even optional), only an auxillary port and a USB charging point, which means you can only listen to music stored on a portable device. On the one hand, not having a radio seems unnecessarily stingy. After all, even Tata kept it optional on the Nano. But nowadays, most music is stored not on physical media like CDs, but on digital devices. The lack of a radio is, arguably, a more user-friendly decision that also saves money.

Renault Duster India March 2014What Car India says the Renault Duster ‘doesn’t feel premium enough’ for the price. Wait what?

3. Low cost is premium

Car prices are on a drastically different scale in India:  they are not just a little cheaper, but in a different ball game altogether. That’s because salary levels cannot compare with Western countries. A young taxi driver earns around $150 per month which is considered a relatively good revenue. A Taj Mahal entry ticket is INR750 ($12) for tourists but INR20 ($0.35) for locals. And all prices are in line with this, including cars.

This way, models considered low cost in Europe are borderline premium in India. And this is where Renault’s strategy of selling Dacia models under the Renault brand in emerging markets takes its full meaning. Starting at US$15,200, the Renault Duster is not the cheapest SUV/MPV on sale in India, and local magazine What Car? says ‘it doesn’t feel premium enough’ for the price. The Duster failing in the value-for-money equation is something I never thought I would see printed anywhere. But in India it makes sense.

Maruti Alto 800 India March 2014. Picture courtesy Matt GasnierThe Maruti Alto 800 starts at US$4,740 in India.

For a better idea of Indian prices, consider this: a Tata Nano starts at US$2,890, the Maruti Alto 800 at $4,740, the Hyundai Eon at $5,400, the Maruti Celerio at $6,280, the Honda Amaze at $8,330 and the Honda City at $12,000 (though the City is considered a more premium, Japanese-made car). A very large proportion of new car sales are happening well below $10,000. As far as models sold across different continents, they typically sell for half the price in India than in France. The Maruti (Suzuki) Swift starts at $8,500 in India vs. $16,100 in France, the Nissan Micra at $8,800 vs. $16,000, VW Polo at $9,500 vs. $17,700 and Ford Ecosport at $12,200 vs. $28,800!

In other words, it is impossible to truly compete in the Indian market without manufacturing locally. If you want to undercut local behemoth Maruti by selling ‘more car for the money’, you have to come up with completely new ways of thinking a car – the Datsun Go being a great example. This price structure becomes relevant on the world scale when you take into account that most African countries have even lower average monthly revenues. Manufacturers that will manage to build and sell an attractive car for this type of money will have all chances to succeed in Africa when it booms, and it will.

Tata Nano used. Picture courtesy of What Car March 2014A daunting task…

4. A hate of used cars

In this context, with a starting price at launch of roughly US$1,700 in 2010, Tata was hoping to sell millions of Nanos in India and even expected it would single-handedly increase the total size of the local new car market by 65%. It didn’t happen. And while this situation has boggled me for a long time, interacting with Indian consumers and exploring local roads with my own eyes has started to bring a few explanations to light.

First and foremost, the long-term view about low-cost cars is that they compete with used cars in the mind (and wallet) of consumers. It’s a little less true now in Europe where Dacia has somewhat shaken off its ‘dirty’ low cost image, but it was the case for the first generation Logan. The thinking was that as long as one could buy a new car for the price of an equivalent used one – but this is not true in India.

Tata Nano India. Picture courtesy of caranddriverIndia sees trade-up from motorcycle to new car, bypassing used cars altogether.

For example, a comparo between a brand-new Skoda Superb and a 4-year-old Mercedes E-Class in this month’s issue of What Car? India gave the Superb as winner. The conclusion that they came to isn’t terrible difficult to understand, but their reasoning provides a lot of insight.

“Car buyers in India usually shy away from used cars. The second-hand car market is still a big fat grey area, there is the added scare of buying something that’s been abused. If the Mercedes requires major work, it could become exorbitant. Yes, Skoda has a poor reputation for service and parts are expensive here too. And ‘I drive a Skoda’ doesn’t have the ring of ‘I drive a Mercedes’. Still, our choice here is the Skoda.”

Buying an entry level car in India is more a choice between replacing a motorcycle/scooter or trading up to a new car. The ‘used car’ box is bypassed altogether, as there are still too many unknowns associated with it and the used car market is far from regulated. It has become a bit of a vicious circle with cars depreciating extremely fast.

So why did India not choose to trade up from motorcycle to brand new Nano?

Delhi Agra Expressway. Picture courtesy of automark-india.comThe Yamuna Expressway opened in 2012, cutting the Delhi-Agra travel time from 5 to 3 hours.

5. Interstate travel in style – What the Indian consumer really wants

In their assessment of the Datsun Go, What Car? India says

“it’s clear that Datsun tried to make it look anything but budget. The Go has a peppy engine, spacious interiors and is easy to drive. It seems like a lot of car for the money.” 

An observation that goes against most Western observers that qualify the Go as nothing more than a bland and cheap copy of the Nissan Micra. Not in India. There, it is robust, handy and stylish enough to earn the right to be taken on interstate travels with pride.

And that’s the key. What can an Indian family do with a car that it cannot with a motorcycle? For them, it’s the ability to make long-distance visits to their extended families. The family takes a central role in any Indian person’s life, and only 20% of the entire population of India lives in big cities – stressing the need for interstate travel between smaller towns. Along with cars, the local infrastructure is fast improving – the Delhi-Agra Yamuna Expressway I travelled on was only 2 years old.

 

Tata Nano driving speed. Picture courtesy What Car India March 2014“Can I push my Tata Nano hard?” The answer is no.

To understand the failure of the Tato Nano, you have to take a journey to India’s motorways, where cars like the Go can often be seen blazing along at 150 km/h, despite the official 100 km/h limit. It becomes a little more obvious the Nano is, paradoxically, not cut for India. A What Car? reader asks “Is it safe to drive the Nano at 80-100km/h?” The magazine responds

“the Nano is fundamentally a city car and isn’t designed for high speeds. Driving it close to its maximum speed (105km/h) isn’t advisable. For the same money, it’s best to pick up a slightly used car like a Maruti Alto which feels more secure at highway speeds”.

So the Nano is ‘the cheapest car in the world’, but one cannot get out of the city with it, which limits it to a 2nd or 3rd family car, and Indian families that can afford a 2nd or 3rd car would not be seen dead in a Nano. Not stylish, too frugal, not a ‘real’ car. The loop is looped. The Nano could only attract posh city-dwellers that don’t really need a car and to them it’s not attractive. Now I’m generalising a bit, but you get the idea.

Hyundai Grand i10 Maruti Swift. Picture courtesy of zigwheels.comMaruti Swift & Hyundai Grand i10. Maruti and Hyundai are in Datsun’s line of fire. Tough targets?

What next?

My stay in India came at an important time in the local car industry: when Nissan, reviving the Datsun brand to make it its entry offering, launched its first ‘ultra low cost’ model, the Datsun Go – but don’t go calling it ultra low cost in India – Carlos Ghosn did not mention the word ‘low-cost’ once when he unveiled the car last year. Initial sales figures will show very quickly whether this adventure has been worth all the ‘bottom-up innovation’ trouble. Datsun has already announced its next two Indian launches: in late 2014, the US$7,500 Go+ MPV will arrive and in 2015 the US$4,990 Redi-Go hatch. If successful, expect Datsun to start launching in Africa very soon, and the start of a fascinating new chapter in the history of world automobile will have been written.

Matt Gasnier is based in Sydney and runs a website called BestSellingCarsBlog, dedicated to counting cars around the globe.

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36 Comments on “Best Selling Cars Around The Globe: Understanding The Indian Car Market...”


  • avatar

    Very insightful analysis, Matt, thanks. It’s amazing to me how Tata could misread their own market that much. I think all makers have to climb a mountain in India though. Called the Maruti 800, it seems so well adapted to local conditions that it’ll be tough to break their hold of the market (kind of like the Gol here).

    Due to our globalized world, what happens in India is causing waves the world over. The EcoSport I’m sure would’ve been a larger car were it not aimed so directly at India. The Etios is a relative flop in Brazil due to its dorky sheetmetal and interior built to make manufacturing easier, especially, but not only, placement of the instrument cluster. On the other hand, Argentina seems to like the Etios just fine (though it remains to be seen whether the Etios’s first place finish last month was due to its own merits or the changes in legislation).

    It remains to be seen how this will pan out. Ford seems to have “learned its lesson” and the new Ka will be what has been called a notchback in India, but a real sedan in Brazil. It would seem that for now, not everything that goes well in India is really suitable in other developing markets.

  • avatar
    LeMansteve

    Interesting insights. I visited India as a tourist last year and remember the Yamuna expressway well. It goes right past the F1 circuit, IIRC. I think your point #5 about the highways and wealth families’ car choices is good. When I was there, I immediately noticed two things about that highway:

    1. The cars are generally much nicer than what you see in the cities. Honda Accords, Camrys, 3-series, C-class, etc. Hardly any subcompact flimsy city cars.
    2. Highway traffic was sparse. Mostly the cars in #1 and commercial trucks.

    • 0 avatar
      CoreyDL

      I would think there to be a lot of buses running between the cities, since most cannot afford a highway-worthy ride.

    • 0 avatar

      Hi LeMansteve,
      A few higher end models indeed but mostly the typical Marutis on the Yamuna expressway when I was there, and lots of Force Traveller, Toyota Innova and Tata trucks. Looks like people may have started to get used to travelling on the Yamuna since you were last there as traffic was certainly not congested but still reasonable.

  • avatar
    jimbob457

    Congratulations. Wonderful piece. I do feel compelled to point out that the rupee has been in a huge slump. This, in part, accounts for the very low prices (expressed in USD) for cars that you quote. The slump may last a long time, but it won’t last forever.

  • avatar

    So, where do India’s used cars go if Indians are averse to buying used cars?

    • 0 avatar
      CoreyDL

      Koreans are very averse to buying used cars as well. Anything 5+ years old is “old and unsafe.” They are also averse to purchasing via a classified ad from a person. When I asked why this was, the answer was that if something went wrong with the car later (even if buying a post-warranty car) that the seller would feel shamed, and you have no recourse.

      I pointed out you have no recourse at a dealer with a post-warranty car anyway, which was met with a blank stare.

      But such is the logic in Korea, often.

  • avatar
    romismak

    I still don´t get those global automakers, all are in India except few-PSA,Kia.. and they can´t get market share away from Maruti. I mean Ford has great vehicle Ecosport and they didn´t maximize potential, Chevrolet is in every segment and are declining, VW group – Skoda and VW marques are doing badly, Renault-Nissan besides Duster/Terrano are also joke in total numbers, now Datsun should be fine. With plants there and bigger dealers networks each month over the country they should be able to sell ,,cheap,, quality cars and compete with Maruti.

    Honda right now is having fantastic last months, amazing numbers, besides having good product i think it´s Honda brand that´s selling – honda as huge motorcycle brand is well known there so it helps for sure. But GM, Toyota, VW 3 biggest global automakers and they can´t do much in India that´s really weird i think, i am not saying they should now overtake Maruti not even Hyundai being comfortably No.2, but they should do better, they have people, plants, money just not right product for indian people.

    Also Tata is big dissapoitment, being by far biggest player in commercial vehicle sector from LCV´s to HCV and Buses and from being years No.3 they last year were down to No.6, so far in 2014 they are 5th bigger than Toyota, but i think it´s temporary only.

    • 0 avatar
      DrivenToMadness

      I have the same exact questions, and my guess is that it may have to do with the product. Carmakers that try to address the Indian market by “costing down” designs targeted for other markets may not succeed (which this article explains), not to mention that even an indigenous OEM such as Tata can badly misread the local consumer needs. Add the fact that it can easily take 5+ years to develop a totally new car platform, it’s not hard to imagine why it may take years (or decades?) for one of the global top carmakers to start to seriously threaten Maruti Suzuki.

    • 0 avatar

      romismak, driventomadness: I think the author touches upon the main issue quite rightly. Drawing parallels to my home country, Brazil, can be a little off, but…

      I think the bottom up engineering is the key. Here, the 2 best sellers in all of history, the VW Gol and the Fiat Palio are examples of this. Over time they’ve been largely engineered here and are very well adapted to local conditions. The dumbbing down often misses the mark and leaves the car with high maintenance costs. While a locally produced 206 may drive better than a Gol and be more visually appealing than a Palio, when you get down to the consumer’s wallet, that extra luster is lost. Like a budget minded buyer in the US that should probably just get a Corolla, Civic or Focus, in Brazil if you want cheap maintenance, a car that everybody and their uncle can work on, parts available country wide, just buy a Gol, Palio or Uno and be done with it.

      There’s also the interesting case of engineering specifically for local conditions. In Brazil, dust and water are the dangers. Water and dust can get in and wreck damage on even the best first world cars. Our road conditions break things in your suspension you didn’t even know existed. Bad, adulterated gasoline creates havoc on the most sophisticated injection systems (in Brazilian cars there’s no direct injection due to this, imagine the problems of some imported cars that feature direct injection). All of this has to be taken into account and that takes a learning curve.

      Renault-Nissan-Dacia-Datsun’s approach has a good chance. Being new cars, using lots of very modern, and very reinforced bits, together with a crude, but durable finishing, goes a long way to making a car a success in the developing nations.

      So that’s what it takes I guess, modern cars but tough, durable and simple, cheap aftermarket, availability of parts, penetration of network. It can’t be dome from one day to the next.

      • 0 avatar
        DrivenToMadness

        Personally I found the “no lockable glove box” feature in the Datsun Go fascinating…and a good “out of box” thinking example–pun intended. For those of us who are accustomed to cars with “real” glove boxes (meaning we grew up sitting in dad’s cars that had these glove boxes), we may never accept one that doesn’t have a lid (even though I never lock mine). However, if (and this is just my conjecture) the consumers have never previously owned cars in the family, a new car with just a cubby instead of a lockable glove box isn’t immediately detected as “cheap.” I guess it’s the reverse of how typical Americans perceive of hatchbacks…

        • 0 avatar

          You know what, I didn’t even notice it until you mentioned it. Thank the bottom up engineering. If it had been a dumbbed down product, you’d be left with an ugly, gaping hole in the dashboard. Good catch, and yes, people who have already had cars will notice and complain, people moving up from a moped will not flinch.

      • 0 avatar
        jimbob457

        A wise observer once described a car as a mechanical salad. Some of the parts in even the most up-to-date first world cars are based on 40 or 50 year old designs refined to use modern materials. One of the virtues of bottom up engineering is that it doesn’t ever have to reinvent the proverbial wheel. Many components can be copied from long proven first world designs.

  • avatar
    tonycd

    Fascinating and informative. I’ve never seen an overview of the Indian market that makes sense of it to an uninitiated person (like me) as this does. Thank you.

  • avatar
    Thavash

    I was in India last month as well, and can agree with everything you’ve said. I even purchased the same Indian magazine that you got some of the pics from !!

    My take on the used car thing – I wouldn’t want to buy a used car there after seeing how cars are treated and the way they drive. I even think if I was a rich guy living there , I’d buy something cheap and robust. I don’t know how you could drive a 5 series in that chaos ( especially in Delhi )

  • avatar
    sproc

    Excellent article. One thing I’m curious about with these modern, entry level cars like the Datsun Go is do they have modern pollution controls? Not necessarily CA emissions standards, but just any reasonable attempt at all?
    I last visited Mumbai in 2001, and with few exceptions, the visible tailpipe emissions were insane. The smog made LA look like Montana in comparison.

    • 0 avatar

      Thanks Sproc – entry level cars comply with the pollution laws in vigour in India which are very lenient compared to the rest of the world. Any (unnecessary in the local context) attempt to over-perform in this area would increase the price of the car drastically.

  • avatar
    Glenn Mercer

    This is a very helpful and informative article, from which I learned a lot. I think, however, that it would be even more complete if the author had mentioned that India effectively bans the importation of used cars from abroad. (I am not referring to used cars that are originally new cars made in India.) In many other low-income nations, e.g. in Africa, and in fact in other high-income nations that lack their own car industry (e.g. New Zealand), used cars shipped in from Japan or Europe (depending on which side of the road one drives on) can become a vital portion of the fleet. If such imports are (effectively) banned — India loads them with immense tariffs, inspection rules, and other burdens — then the gap is filled by 2-wheelers, 3-wheelers, and ultra-low-cost new cars such as Nano. In fact, if one looks at the IHS forecasts of ultra-low-cost-cars around the world, all expected future production of these is in Europe.

    I am no development economist, but I wonder if the Indian government, in restricting the import of used cars in order to protect the domestic new-car industry, is in fact overall hurting the welfare of its citizens, by so sharply limiting their choices. I am not sure there would be the same cultural bias against used cars the author cites, if the choices of used cars were broadened to include 5- and 10-year old cars from Europe or Japan.

    • 0 avatar

      Hi Glenn,
      Glad you learned a lot from the article. Indian consumers’ aversion towards used cars is more due to distrust regarding the previous usage of these cars (and seeing how cars are handled daily in India, one understands this distrust) than measures preventing the import of used cars.
      In fact, 5 or 10 year-old imported cars from Europe or Japan would still be way more expensive than local used cars even without tariffs, due to the extremely low selling price of new cars in the country and their rapid depreciation.
      To compete in price you’d have to import 20+ year-old cars and this poses an even stronger threat on the welfare of Indian drivers as those cars are actually unsafe for the most part. As such, a lot of African countries themselves have started to ban used imports that are over 10 years old.
      Hope this clarifies.

      • 0 avatar
        Glenn Mercer

        Thanks for the clarification. This does beg the question: if Indian consumers either cannot afford or do not want imported used cars… then why does the Indian government apply such draconian constraints on their import? I cannot imagine that the safety argument is any concern to the Indian government, given the low level of safety equipment required on NEW Indian cars.

        I don’t doubt you are right overall, but I still wonder why such cars are essentially banned, “if no one wants them,” there is no need for such a ban.

      • 0 avatar
        Glenn Mercer

        I think to compete with the CHEAPEST new Indian cars you would indeed need to import very old used European cars, yes. But doesn’t India have a huge middle class, which can afford more than the cheapest new car India makes? And wouldn’t imported used cars that were only 5-10 years old compete with those? If they would NOT compete with mid-range new Indian cars, why has the Indian automakers’ association, SIAM, lobbied for retention of the (virtual) ban on imported used cars? From The Hindu, August 8, 2000 (since the restrictions on imported used cars were tightened in 2001): “Both SIAM and ACMA (Automobile Component Manufacturers’ Association) have been actively lobbying with the Government for restricting import of used cars, with a tight tax regime.” (There is much more in the article, but I don’t want to fill the whole page up here with excerpts.

        I think the active lobbying of NEW car OEMs in India AGAINST the importation of USED cars indicates that arguments that Indians “don’t want” or “can’t afford” imported used cars are somewhat suspect. If these assertions are true, then drop the import constraints and let the free market demonstrate what Indians do or do not want.

        Right now all the arguments about what Indians should or should not want, or would or would not want, while they have almost no choice in the matter, are hypotheticals. Frankly, they sound like veiled protectionism to me.

    • 0 avatar

      Bad, bad idea. Developing nations are not the trash cans of the first world. Keep your trash in your own backyard. This kind of thing only benefits the developed world for só many obvious reasons i Just dont Want to get into. It is hard for even some smart people to understand But cara like the Maruti exist and dominate for a reason.

    • 0 avatar
      jimbob457

      @Glenn
      At the moment India’s currency is hugely depressed because these days India has little in the way of exports that the world badly wants. On a purchasing power parity (PPP) basis the rupee trades for just 37 cents compared to the US dollar. In other words, the overall average cost of living in India is 63% below that in the USA. This applies to the whole country, not just big city hotels, etc.

      By comparison the Chinese yuan/renmembi trades for about 59 cents. The Japanese yen is about 80 cents. The UK pound about 97 cents. The Australian dollar, buoyed by high metals prices, trades at 1.12 dollars. The euro is about the same. The Brazilian currency is strong at about 1.29 dollars.

      I don’t want to attempt to teach a crash course in international trade, but when the value of your currency is depressed, imports become dear and substituting domestic production (import substitution) becomes attractive. Further, should the depressed value of the rupee continue, it will eventually make exporting Indian cars to places like Africa an attractive proposition.

      Not to say that taxes and tariffs, taxes, et.al. are not a factor, but this largely why Japanese and British used car exports to India are minimal. Meanwhile, such exports to places like Australia are quite a big deal. In short, if a country doesn’t have the exports to pay for the imports of used cars, it tends not to happen.

      • 0 avatar
        Glenn Mercer

        Thanks for the additional info. But see my comment above:
        Thanks for the clarification. This does beg the question: if Indian consumers either cannot afford or do not want imported used cars… then why does the Indian government apply such draconian constraints on their import? I don’t doubt you are right overall, but I still wonder why such cars are essentially banned, “if no one wants them or can afford them,” there is no need for such a ban.

        • 0 avatar
          jimbob457

          @Glenn
          From Ask.com: The major exports of India are:
          computer software, agricultural products like cashews, coffee, cotton textiles and clothing (ready-made garments, cotton yarn and textiles), gems and jewellery,
          while its primary imports are edible oils, fertilizer, food grains, iron and steel and industrial machinery.

          In this situation, dropping the import barriers on used Japanese, UK and other right hand drive vehicles would clearly result in more such imports thus directly benefitting the Indian upper middle and upper classes. It would directly harm the emerging Indian domestic car industry. It would further depress the rupee causing edible oils, fertilizer and food grains (see Ask.com items above) to become more dear – a sort of reverse Robin Hood effect.

          You are a democratically elected Indian politician. How would you vote?

          The world is sometimes a bit more complicated than it as it is presented in a university class room. My old economics professors used to joke that ‘welfare theory is entirely valid given its assumptions that the world is entirely continuous and twice differentiable.’

          • 0 avatar
            Glenn Mercer

            So it seems you do agree with me. In your first comment on my comment you argued that Indians could not afford imported used cars, and in your second comment you argue that import of such used cars would increase if the barriers against them were dropped, implying at least someone in India would buy such cars?

            I am not arguing POLICY here (what the Indian government should or should not do, whether allowing used imports is good or bad), only asserting that, until barriers against used imports are dropped, we all just talking in hypotheticals: we have no actual proof that Indians will or will not want or afford or buy imported used cars, as long as they are not given the choice to do so.

            (And if we dredge up the safety argument, that the government wants to protect Indians from dangerous old imported clunkers, then why does the government allow domestic makers to produce even more dangerous three-wheelers?)

            In many of the comments I see protectionism and paternalism disguised as objective reasoning. If Indians don’t want imported used cars, because they cost too much, or because Indians don’t trust the quality of used cars, then neither the government nor the domestic new-car industry should argue (as they have been, specifically with the EU) that barriers against them must be maintained.

      • 0 avatar

        Suzuki already sees India as an export hub for the developing world.

        • 0 avatar
          jimbob457

          @Glenn
          Huh?
          What I said earlier was:
          “Not to say that taxes and tariffs, et.al. are not a factor, but this is largely why Japanese and British used car exports to India are minimal.”

          The antecedent of ‘this’ was the currently unfavorable exchange rate for the rupee.

          We don’t disagree about basic economic theory.

  • avatar
    siddharth

    The India has strict Pollution rules Comparable to euro norms.At present it is euro 4 equivalent in 11 cities but in rest of India it is euro 3.The problem stems from poorly maintained vehicles as the cost of fuelling the car is very costly so maintaining a car as it ages is costly due to which used cars are poorly maintained Also infrastructure and public transportation is poor
    Infact India is more like Africa than other Asian countries.As car is still seen as luxury and this makes even owning a car a status symbol.
    Indian cars are not crash tested as it is not mandatory so many cars lack a rigid safety cage- so cost of production is low.

  • avatar
    Athos Nobile

    Great analysis Matt. Let’s hope their product planning people got it right.

  • avatar
    Glenn Mercer

    Cool, thanks, I misunderstood. I stand (or actually, sit) corrected.

    For more background on all this (and this link is meant just as that, for historical background, not to make a point or to grind an axe), an article from back around 2000, when the Indian rules on used-car imports were made much more strict:

    http://www.columbia.edu/~ap2231/ET/et19-nov00.htm

  • avatar
    stanczyk

    This ‘Bottom-up innovation’ is strategy that corporations are preparing to perform in ‘rich western countries’..
    After next ‘financial-crisis’ .. Datsun ‘Redi-Go hatch’ or II gen. TATA NANO(‘turbo GTI’) will be your next dream-car .. :) ..
    and belive me Marketing and PR depatments are working on topic right now: how to ‘brainwash’ people(mostly young-hipsters[virtually-brainwashed anyway:]) to accept, and even to like(via facebook:) this kind of ‘global-product-junk’ ..

    ..

    This ‘global product’ corporate-attitude(‘one world taste’ .. ‘cost-cutting’ mantra) is moto-NWO ..


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