Loads of Cost Cutting Options- Keeping Prices Low
Very early on, most carmakers in India figure out the magic rule. Keep costs low and footfalls at the dealerships will grow. Ironically, the Government mandated regulations pertaining to carmakers in this country wasn’t an unbearable heap and thus, carmakers could get creative when trying to save costs. Two examples of this are- 1) The lack of any New Car Assessment Program (NCAP) in the country ensured that OEMs could play around the safety features on their car models. When you compare cars in India, the glaring omissions are that much more apparent. Base models of most cars are barebones, while you pay extra for variants that include such basic safety features as ABS and airbags. Thankfully, this problem has been sorted with effect from January-2017 with the Indian government mandating ABS and dual-airbags across all car variants alongside the proposed setting up of the Bharat New Vehicle Safety Assessment Program (BNVSAP).
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2) The Indian Government, with an intent to decongest the roads, encouraged the production of sub-4 meter hatchbacks as against longer cars. Such cars will attract a lower excise duty than the longer (4 meters plus) cars. The inventive carmakers found a loophole here and began fitting engines that ideally should fit into bigger frames onto sub- 4 meter car bodies. Tata Motors, an Indian carmaker, began this trend with the Indigo CS and post its tremendous success, other carmakers quickly adopted this deceptive trick. Today, the Compact Sedan/ SUV segments are the most money spinning factions in the Indian automotive industry.
True, India is a land of opportunities. From small Indian cars to elaborate productions from foreign OEMs, if the carmaker has the will, there is always the way.