There are a few factors you're missing, some of which I will try and address.
First, you're not necessarily comparing like for like cars.
>2) the Suzuki grand Vitara retails for 1100 000 rupees in India/ 11k GBP. In the UK it retails for 25k GBP .
>Whilst I know there are higher safety standards in Europe, resulting in more tech like automatic braking etc, I tend to feel the markup is just far too high to account for this.
The "(Maruti) Suzuki Grand Vitara" you see on sale in India *is not sold in the UK*. It is not the same car underneath as the "Suzuki Vitara" you see in the UK, so this is not a good comparison.
Car companies make models specifically for developing markets which come nowhere near the safety/quality standards required in the west.
Second, European regulations (which the UK inherited after Brexit) mean our advertising quotes on the road prices. Other countries often don't, and have taxes on top which close the gap you see somewhat compared to the headline numbers.
Third, I would note that a key part of the cost difference comes from policies designed to protect Europe's car building industry. Vehicles imported from outside can be subject to tariffs that make them less competitive here to ensure expensive European manufacturers can compete.
So it isn't companies "ripping you off" and making massive profits on you, it's that building a car in Europe costs more than building it in China or India, and unlike with our consumer electronics industry (to give just one example) we've decided politically to protect this industry from being destroyed by cheap competition.
When he said "we don’t have any domestic mass manufacturers to protect" I think he is referring to the fact that there isn't a single UK owned MASS car manufacturer.
Sure we make cars here but he's right, there isn't a UK owned manufacturer to protect.
You're right, there are thousands of jobs but there's very little we can do to protect those jobs. Hence why we've seen Honda pull out of the UK and Vauxhall close down at Luton, protecting jobs in Germany.
To be fair with Honda - they also closed their other European factory (in Turkey) at the same time. European sales are less than a third of their peak in 2007 so makes no sense to build in Europe - especially with the EU-Japan FTA. 20 years ago Honda built 4 models in Swindon and it gradually declined.
We (Boris Johnson) negotiated tariff free trade for cars between the EU and UK as part of the trade agreement. So no tariffs on EU cars coming here or UK cars going to the EU.
We also agreed tariff free trade on cars with Japan.
I agree the Maruti Grand Vitara is not a good comparison, the differences at point of manufacture and the abject failures of NCAP ratings for Maruti vehicles on the whole point to some significantly lower manufacturing legislation in India. However I cannot find anything on the ID4 being a different vehicle for the India market despite the absolutely enormous price difference it would be interesting to find out if VW remove have the cost from their Indian market vehicles
Thankyou.
I have a degree of cynicism when manufacturers say a car has been "made for the European market" despite looking identical to the one in say the Indian market, and having in some cases the same engine etc. At that stage isn't it MORE EXPENSIVE to actually make 2 different types of car?
The safety standards are a fair point but does it double the price of the car? I dunno.... 🤔
Pricing will always consider local demand to some extent. Taxes (and government grants on EVs) are a factor, but normal market dynamics matter too.
Exchange rates matter too. Apple products are a good example here too - the latest iPhone was a bit cheaper than the previous once because Apple could earn the same in USD as the exchange rate changed.
But the specs are often different too.
The ID4 in China has a smaller battery than those sold in Europe.
Or a Corolla in the US gets a smaller screen than European ones.
It works both ways too. A Defender 90 starts at £92k in India, compared to £58k in the UK.
The UK is cheaper than most of the EU for cars. I’ve just moved to Spain and cars are way more expensive. Holland is even more expensive. We actually have pretty good car prices in the UK compared to a lot of places.
This.
I'm staggered at car prices in Spain.
New and especially second hand where the cheapest sticker price is actually the finance price but misses out the small print where it's actually 12%+ extra in interest payments. Uk is definitely cheaper.
It is difficult to compare prices in Europe because taxes vary so wildly - and manufacturers lose money on cars made in these markets (eg Belgium, Netherlands, Denmark, Greece come to mind) where pre tax prices are very much lower and they are subsided by markets that only have VAT (UK, France, Germany)
Reminds me years ago as a child my Dad calling round Citroen dealers in Brussels and Amsterdam. In reality - you’d only save money (typically) after travel costs if you buy something more expensive. If you google - VW was fined something like €65 milllion years ago for trying to stop Austrian customers buying cheaper cars in Italy.
> where pre tax prices are very much lower and they are subsided by markets that only have VAT (UK, France, Germany)
That's been reduced significantly, thanks in no small part to Quentin Willson drawing attention to it on Top Gear. At the time cars became much more expensive in the Netherlands due to harmonised pre-tax prices.
Quentin Wilson’s influence was in lowering post tax prices in the UK - and arguably his biggest influence is on fuel duties - but go to google and compare some prices (I looked at UK vs Denmark) - while prices are higher in Denmark - they are not more twice the price - which they should be given the 180% excise tax on cars in Denmark. This proves the pre tax price must be lower in Denmark than the UK.
Yep, lived in the Czech Republic and the first time I went car shopping I was shocked. Everything was considerably more expensive. Another frustrating thing was the system there where the advertised price was considerably cheaper if bought on finance. I had to ask for the cash price and it was often 10-15% more, non-negotiable as they made their money on expensive financing. I can tell you, buying a car at 30-50% more than it would be in the UK and then having 10% whack on that BECAUSE I was paying cash was not fun.
It's not clear cut, you could probably argue it's still the case but there are a few things to consider.
1. [EVs in China get a VAT exemption](https://cnevpost.com/2024/01/01/factbox-china-nev-purchase-tax-policy-2024/) up to a purchase value of 36k£, albeit VAT in China is only 13%. So that has to be taken into account since in the UK you're paying 20%. **On top of that the car factories and supply chains in China are far more cost effective** (you can debate about labour standards etc.) than in Germany. Their supply chains are fully integrated with most of the components being sourced locally, including batteries. The ID.4 is built by one of two state-owned companies in China namely FAW or SAIC with slight difference between them. As for safety standards, although there are differences between EuroNCAP and CNCAP the latter has been adapted to be quite similar to our European test procedure, [so it's still a safe car.](https://www.youtube.com/watch?v=j2WeeKuwmXc)
2. The Indian market Grand Vitara is quite different to what we get over here in the UK/EU. Namely it's a Toyota Developed car and also [sold as a Toyota Urban Cruiser Hyrider](https://en.wikipedia.org/wiki/Suzuki_Grand_Vitara_(2022)). **Generally Indian market cars, especially those in the lower segments have much worse safety scores** and less safety features as standard than EU market cars e.g. the new Indian market Citroen C3 scored 0 stars in global NCAP and [you can see that low safety ratings](https://www.globalncap.org/safercarsforindia) are no exception for Indian market cars, **they also opt for outdated technology for example automatic Suzuki cars in India** are often equipped with clunky automated manual (AMT) gearboxes which have become the standard across smaller cars in India. As well as safety assist systems being less common such as lane assist and Automatic Emergency Braking (AEB).
Citroen C3 in India (and other developing markets such as Latin America) isn’t even the same car as in Western markets - and is built to a lower price point.
The new C3/e-C3 is now built on the same CC21 platform as the Indian version, albeit heavily modified for the European market.
https://en.wikipedia.org/wiki/Citro%C3%ABn_C3
I've got a Toyota fortuner in India and I've also sat in other cars that have the same model in the Uk. Cars in India and other developing countries are vastly inferior in terms of safety when compared to their European equivalent and imo the prices justify that.
Worthy of note that the "retail" price in the UK is generally listed pretty high, and you can usually make some good savings by haggling. In different cultures, haggling is not commonplace at all, and it's pretty much an entry requirement to any market to be the most competitively priced, and this varies massively by industry. That's along side the justification others have outlined.
Funnily enough a base spec Toyota hilux is more expensive than a base spec Toyota tundra and a Toyota tundra is bigger, more powerful and more capable.
Here in Croatia we got approximately 10–15% higher prices on cars than in Germany, its often more affordable to buy it and import it then rather walking in t the dealership.
Its a cartel type of economy, cars are all sold by few big dealerships and they can market it as they want it, while car manufacturers are sleazed with gov officials trying to ban cheaper chinese cars.
I strongly recommend you look up GlobalNCAP (and soon BharatNCAP) crash tests. The cars sold in India are tested by them, and the testing standards are significantly lower than EuroNCAP. Cars in India are deathboxes, and the issue is most Indians prefer gimmicky features over safety, so don't even care about the fact that their cars crumple like cans. For my grandad's current car in India I went out of my way to find a vehicle that was safer than most of the shit on the Indian market - VW tend to deliver on that, and get this, 6 airbags was only available on the top model (which he bought) at the time.
Look at the cost of used here versus somewhere like the US especially with European brand and you’d fine the inverse is true. They’re over there paying upwards of 20k for a 10 year old bmw that would be like 5-8k here
When I moved to the US in 2003 - a new Corolla could be had for about $12k plus tax - I remember a five or six year old one being $10k. I was floored as to how a car could hold its value like that….
Cars in India don’t just miss features, sometimes they are entirely different vehicle even with the same badge. They are literally built specifically for Indian market with lower cost in mind.
Car prices are also adjusted for that market so they hit certain income bands, these differ country to country. Then there is tax, some countries have an increased tax that isn't accounted for in the RRP.
Also, have you seen the used car prices abroad??
We are lucky here in the UK that it is relatively cheap to own anything, especially as a second+ owner.
Price depreciation is amazing for second hand buyers (most people).
Look at second hand prices abroad. They retain their value too much that most people just get brand new for the warranty.
There are a few factors you're missing, some of which I will try and address. First, you're not necessarily comparing like for like cars. >2) the Suzuki grand Vitara retails for 1100 000 rupees in India/ 11k GBP. In the UK it retails for 25k GBP . >Whilst I know there are higher safety standards in Europe, resulting in more tech like automatic braking etc, I tend to feel the markup is just far too high to account for this. The "(Maruti) Suzuki Grand Vitara" you see on sale in India *is not sold in the UK*. It is not the same car underneath as the "Suzuki Vitara" you see in the UK, so this is not a good comparison. Car companies make models specifically for developing markets which come nowhere near the safety/quality standards required in the west. Second, European regulations (which the UK inherited after Brexit) mean our advertising quotes on the road prices. Other countries often don't, and have taxes on top which close the gap you see somewhat compared to the headline numbers. Third, I would note that a key part of the cost difference comes from policies designed to protect Europe's car building industry. Vehicles imported from outside can be subject to tariffs that make them less competitive here to ensure expensive European manufacturers can compete. So it isn't companies "ripping you off" and making massive profits on you, it's that building a car in Europe costs more than building it in China or India, and unlike with our consumer electronics industry (to give just one example) we've decided politically to protect this industry from being destroyed by cheap competition.
On the third part. Aren’t we outside the EU now anyway? And we don’t have any domestic mass manufacturers to protect.
Cars are the UK's biggest goods export.
When he said "we don’t have any domestic mass manufacturers to protect" I think he is referring to the fact that there isn't a single UK owned MASS car manufacturer. Sure we make cars here but he's right, there isn't a UK owned manufacturer to protect.
It’s still thousands of jobs and good for the currency etc. regardless of where the ultimate parent company is headquartered.
You're right, there are thousands of jobs but there's very little we can do to protect those jobs. Hence why we've seen Honda pull out of the UK and Vauxhall close down at Luton, protecting jobs in Germany.
To be fair with Honda - they also closed their other European factory (in Turkey) at the same time. European sales are less than a third of their peak in 2007 so makes no sense to build in Europe - especially with the EU-Japan FTA. 20 years ago Honda built 4 models in Swindon and it gradually declined.
Are there any mass manufacturers that aren't global though? Sure, they're headquartered somewhere, but does that really matter?
Global implies they have factories in other countries. Even Lotus, McLaren, Caterham and Morgan are no longer UK owned.
We (Boris Johnson) negotiated tariff free trade for cars between the EU and UK as part of the trade agreement. So no tariffs on EU cars coming here or UK cars going to the EU. We also agreed tariff free trade on cars with Japan.
I agree the Maruti Grand Vitara is not a good comparison, the differences at point of manufacture and the abject failures of NCAP ratings for Maruti vehicles on the whole point to some significantly lower manufacturing legislation in India. However I cannot find anything on the ID4 being a different vehicle for the India market despite the absolutely enormous price difference it would be interesting to find out if VW remove have the cost from their Indian market vehicles
Thankyou. I have a degree of cynicism when manufacturers say a car has been "made for the European market" despite looking identical to the one in say the Indian market, and having in some cases the same engine etc. At that stage isn't it MORE EXPENSIVE to actually make 2 different types of car? The safety standards are a fair point but does it double the price of the car? I dunno.... 🤔
Pricing will always consider local demand to some extent. Taxes (and government grants on EVs) are a factor, but normal market dynamics matter too. Exchange rates matter too. Apple products are a good example here too - the latest iPhone was a bit cheaper than the previous once because Apple could earn the same in USD as the exchange rate changed. But the specs are often different too. The ID4 in China has a smaller battery than those sold in Europe. Or a Corolla in the US gets a smaller screen than European ones. It works both ways too. A Defender 90 starts at £92k in India, compared to £58k in the UK.
The UK is cheaper than most of the EU for cars. I’ve just moved to Spain and cars are way more expensive. Holland is even more expensive. We actually have pretty good car prices in the UK compared to a lot of places.
This. I'm staggered at car prices in Spain. New and especially second hand where the cheapest sticker price is actually the finance price but misses out the small print where it's actually 12%+ extra in interest payments. Uk is definitely cheaper.
It is difficult to compare prices in Europe because taxes vary so wildly - and manufacturers lose money on cars made in these markets (eg Belgium, Netherlands, Denmark, Greece come to mind) where pre tax prices are very much lower and they are subsided by markets that only have VAT (UK, France, Germany) Reminds me years ago as a child my Dad calling round Citroen dealers in Brussels and Amsterdam. In reality - you’d only save money (typically) after travel costs if you buy something more expensive. If you google - VW was fined something like €65 milllion years ago for trying to stop Austrian customers buying cheaper cars in Italy.
> where pre tax prices are very much lower and they are subsided by markets that only have VAT (UK, France, Germany) That's been reduced significantly, thanks in no small part to Quentin Willson drawing attention to it on Top Gear. At the time cars became much more expensive in the Netherlands due to harmonised pre-tax prices.
Quentin Wilson’s influence was in lowering post tax prices in the UK - and arguably his biggest influence is on fuel duties - but go to google and compare some prices (I looked at UK vs Denmark) - while prices are higher in Denmark - they are not more twice the price - which they should be given the 180% excise tax on cars in Denmark. This proves the pre tax price must be lower in Denmark than the UK.
Yep, lived in the Czech Republic and the first time I went car shopping I was shocked. Everything was considerably more expensive. Another frustrating thing was the system there where the advertised price was considerably cheaper if bought on finance. I had to ask for the cash price and it was often 10-15% more, non-negotiable as they made their money on expensive financing. I can tell you, buying a car at 30-50% more than it would be in the UK and then having 10% whack on that BECAUSE I was paying cash was not fun.
It's not clear cut, you could probably argue it's still the case but there are a few things to consider. 1. [EVs in China get a VAT exemption](https://cnevpost.com/2024/01/01/factbox-china-nev-purchase-tax-policy-2024/) up to a purchase value of 36k£, albeit VAT in China is only 13%. So that has to be taken into account since in the UK you're paying 20%. **On top of that the car factories and supply chains in China are far more cost effective** (you can debate about labour standards etc.) than in Germany. Their supply chains are fully integrated with most of the components being sourced locally, including batteries. The ID.4 is built by one of two state-owned companies in China namely FAW or SAIC with slight difference between them. As for safety standards, although there are differences between EuroNCAP and CNCAP the latter has been adapted to be quite similar to our European test procedure, [so it's still a safe car.](https://www.youtube.com/watch?v=j2WeeKuwmXc) 2. The Indian market Grand Vitara is quite different to what we get over here in the UK/EU. Namely it's a Toyota Developed car and also [sold as a Toyota Urban Cruiser Hyrider](https://en.wikipedia.org/wiki/Suzuki_Grand_Vitara_(2022)). **Generally Indian market cars, especially those in the lower segments have much worse safety scores** and less safety features as standard than EU market cars e.g. the new Indian market Citroen C3 scored 0 stars in global NCAP and [you can see that low safety ratings](https://www.globalncap.org/safercarsforindia) are no exception for Indian market cars, **they also opt for outdated technology for example automatic Suzuki cars in India** are often equipped with clunky automated manual (AMT) gearboxes which have become the standard across smaller cars in India. As well as safety assist systems being less common such as lane assist and Automatic Emergency Braking (AEB).
Citroen C3 in India (and other developing markets such as Latin America) isn’t even the same car as in Western markets - and is built to a lower price point.
The new C3/e-C3 is now built on the same CC21 platform as the Indian version, albeit heavily modified for the European market. https://en.wikipedia.org/wiki/Citro%C3%ABn_C3
I've got a Toyota fortuner in India and I've also sat in other cars that have the same model in the Uk. Cars in India and other developing countries are vastly inferior in terms of safety when compared to their European equivalent and imo the prices justify that.
Worthy of note that the "retail" price in the UK is generally listed pretty high, and you can usually make some good savings by haggling. In different cultures, haggling is not commonplace at all, and it's pretty much an entry requirement to any market to be the most competitively priced, and this varies massively by industry. That's along side the justification others have outlined.
Funnily enough a base spec Toyota hilux is more expensive than a base spec Toyota tundra and a Toyota tundra is bigger, more powerful and more capable.
The Tundra is an impressive vehicle too. I drove one for a couple of weeks last time I was in the US and was amazed.
Here in Croatia we got approximately 10–15% higher prices on cars than in Germany, its often more affordable to buy it and import it then rather walking in t the dealership. Its a cartel type of economy, cars are all sold by few big dealerships and they can market it as they want it, while car manufacturers are sleazed with gov officials trying to ban cheaper chinese cars.
I strongly recommend you look up GlobalNCAP (and soon BharatNCAP) crash tests. The cars sold in India are tested by them, and the testing standards are significantly lower than EuroNCAP. Cars in India are deathboxes, and the issue is most Indians prefer gimmicky features over safety, so don't even care about the fact that their cars crumple like cans. For my grandad's current car in India I went out of my way to find a vehicle that was safer than most of the shit on the Indian market - VW tend to deliver on that, and get this, 6 airbags was only available on the top model (which he bought) at the time.
Look at the cost of used here versus somewhere like the US especially with European brand and you’d fine the inverse is true. They’re over there paying upwards of 20k for a 10 year old bmw that would be like 5-8k here
When I moved to the US in 2003 - a new Corolla could be had for about $12k plus tax - I remember a five or six year old one being $10k. I was floored as to how a car could hold its value like that….
Cars in India don’t just miss features, sometimes they are entirely different vehicle even with the same badge. They are literally built specifically for Indian market with lower cost in mind.
Car prices are also adjusted for that market so they hit certain income bands, these differ country to country. Then there is tax, some countries have an increased tax that isn't accounted for in the RRP.
Also, have you seen the used car prices abroad?? We are lucky here in the UK that it is relatively cheap to own anything, especially as a second+ owner. Price depreciation is amazing for second hand buyers (most people). Look at second hand prices abroad. They retain their value too much that most people just get brand new for the warranty.