, 17 tweets, 5 min read Read on Twitter
Beyond tweaking, the mindset of the companies has to change. They cannot provide a steel cage worth 5 lakhs, sans any passive/active safety features. People of my generation are better without cars for their daily commute. A solid public transport system is the key. 1/n
Following the pattern, I take example of #USA where street cars are making a comeback and millennials are shunning their cars. This has triggered property development across such public transport corridor. Similarly, cities have to ramp up public transportation. 2/n
Likewise, the industry should also rethink its profiteering strategy and go for products that are real VFM for both the customer and the manufacturer. Gone are the days when auto industry saw Customer as the King. For a 10+ yrs, the consumer was taken for a ride. 3/n
When Hyundai Accent was in the market, it OTR price (in Chennai) was around 6L. Accent was huge wrt dimensions and more practical. Now compare that with Xcent and see where the final price. That is pure profiteering by the company in broad daylight. 4/n
So this is not just one player, but the industry acted like a cartel, lead by Maruti. Recently Chairman of MSIL said common man cannot afford a car. My Question is, why should a common man afford a car when he has cheaper alternative and an EMI free life? 5/n
This so-called slump is more due to flushing out unwanted money from the market. Now pricing of every product (irrespective of the goods we consume) has to re-calibrate itself. Another question to ponder here, was this slump in sales a sudden event? 6/n
I don't think consumer demand slump is a knee jerk reaction here. There is an attitude change by consumers, as the millenials have various other options to enjoy from, instead of Car EMIs for 5+ years. I still remember our first car a M800 in 2005-06. 7/n
The car did its job for more than 12 years before we decided to sell and go for an upgrade. When I went ahead and booked a DZire, I was told, 2-3 months waiting time. Btw, this was for previous gen DZire, I asked the sales Exec, why this waiting period, his answer was weird. 8/n
He said, "Sir, vehicle needs to be shipped from Gurgaon and many are waiting along with your booking." So, next question was a company with over 50% marketshare kept its customers waiting for the car (irrespective of the model) and earn free interest from your purchase. 9/n
For some of my friends, they even pay 1 or 2 EMIs before even you see the car. That is how the companies treated its customers. 10-12K EMI for a car, that too in a middle-income family is no joke. Many cars, that too i10, Swift, Baleno, Polo breached 7L price tag. 10/n
For 7+ lakh, what you get is a car not even with a basic safety feature like a reverse sensor. More ridiculous pricing was in the SUV segment, where cars like Duster were offered with no-airbags for 8L +. It took @MORTHIndia to make these features mandatory. 11/n
Even basic essentials like seat height adjuster, speed sensing door-locking is not available in mid-variants of certain models. Nitpicking can happen all along. But here, the consumers simply decided to shun from the product altogether. Financing vehicles became very costly. 12/n
Car loans now stand above 10%. Such interest rates will push more people away from the swanky auto showrooms. Not all are born rich to pay 2-3L down payments. Just like the auto sectors, even banks took the consumer for a nice ride. Now here is the Car loan int rates in US. 13/n
I know, comparing US & India rates are not equals. But, the insight give a perspective of how banks engage consumers wrt Auto Loan. 15% financing on Ex Showroom means, one has to shell out over 30% from once own pocket. Also, he end up paying EMI with over 10% interest rate. 14/n
Now our media will take just one line out of the @FinMinIndia statement and says people tend to use Ola & Uber, and this resulted in the slump. As usual, media folks top-box is empty and the noise is reverberating. For every 1 lakh car on road, think abt Infra investment.15/n
I remember @nitin_gadkari ji once said, he need to spend over 80K crore to upgrade highways to cater to increasing car sales. I think it is time to end the adrenaline rush towards car ownership, be it EV or ICE engines. The Govt, Banks & Car companies need to think and act 16/n
as one team and find a solution that will pave way for a better pollution-less future. Cities and its roads need to be de-clogged, but not at the cost of public transport quality. Time to encourage auto Mfg towards exports and re-calibrate the pricing & features. 17/17
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