The Indian automobile market is one of the biggest in the world and the increasing prices, especially in the last couple of years, are affecting everyone.
Here is a detailed video explaining the reasons for the excessively increasing prices of cars in India in the last couple of years. While most people simply put the blame on the taxes, we must understand that taxes have been there forever. It is not something that happened only in the last couple of years. Therefore, there has to be a more subtle and nuanced reason for the astronomical rise in prices, particularly for large SUVs like the Toyota Fortuner. Here are the details.
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Reasons for Increasing Prices of Cars in India
The video has been created by Biturbo Media on YouTube. The host mentions that the price of a Toyota Fortuner was Rs 18 lakh in 2009 and has now crossed Rs 35 lakh for the based variant. Similarly, the prices of Mahindra XUV700 have increased by upto 8% within a year of launch. While inflation is also rising rapidly, the increase in car prices is much higher. Here are the real reasons highlighted in this video.
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First of all, there has been a massive rise in commodity prices in the last couple of years. This includes items like steel, aluminium and copper. All these metals are used in cars extensively. There was a pent-up demand in the market after the lockdown and the prices went higher as a result. Additionally, the FAME regulations demanded that the pollution levels from cars be further reduced. As a result, more R&D investment is needed. The company has to increase the prices of its cars to generate more revenue to be invested in evolving technology.
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Finally, the semiconductor chip shortage and global supply chain issues only added to the woes of the industry. The input costs of all these components have been on the rise ever since the pandemic since the demand for electronic components has seen an unprecedented rise due to the prolonged lockdowns and the subsequent development of innovative ways to carry out businesses. All these factors combined have resulted in an exponential rise in the prices of cars in India in the last few years.
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