Cars in India: Huge Price Difference Between Premium and Basic Variants Justified?

For example, the base variant of Renault Kiger costs Rs 6.85 lakh while its top-end model sells for Rs 12.03 lakh.

BHPian Ragsk747 recently shared this with other enthusiasts.

In today’s automotive scene, manufacturers advertise their cars at launch with a lower base price. For some cars, the difference between the base variant and the top variant is almost 2x.

I wonder if the cost is justified? Expert opinions?

For example

The base Renault Kiger RXE MT variant costs Rs 6.85 L while its top variant RXZ CVT Turbo sells for Rs 12.03 L.

Similar case with several other cars like the XUV700, Creta, etc.

Here is what GTO had to say about it:

I have no problem with that. It’s about giving customers choice. However, what bothers me is the glaring “bait & switch”. Many times we see the base variant being launched at a very attractive starting price, but it is never available in the showroom. Its sole purpose was to show a VFM image and bring customers into the showroom. Once inside, they realize that the base variant is not factory shipped at all. Or it is in lowercase homonymous numbers.

Incidentally, higher variants costing twice the price of the base variants are widespread in all segments. At the top end, too, you’ll see the Maybach S-Class and Maybach GLS cost twice as much as their more “regular” siblings. Then, of course, we have the //M & AMG trims that cost 2-3 times the regular cars.

Here is what BHPian Dr AD had to say about it:

I don’t see that as a problem at all. The 2x cost difference is due to the wide variations in engine options, transmission options, and other features. Basically, it just means a wide range of choices for end customers. And I think that’s really good news for the end customer.

Whether the cost is justified or not is up to each individual. There can never be a universal answer to this question. Someone may find that the price of the basic variant is justified and can buy it. Someone else may find the cost of the higher variant (2x the base variant) justified and can buy it. But the good news is that both have their own choices.

Personally, I think multiple engine+gearbox choices are a good thing and I like having the engine+gearbox choice that works for me. For example, I really like the fact that the newly launched Slavia has an MT 1.5TSi + 6-speed option. If I were to buy a Slavia, this would be my setup. But I’m aware that most others would take the 1.5TSi + DSG combo. And it’s good that they have that choice. And then others would take the 1.0 TSi option (as seen in our recent poll on this topic). And it’s again great that they have that option too.

Such large variations in product prices based on configurations are not uncommon in other areas as well. For example, when configuring a laptop, depending on the choice of CPU, GPU, RAM size and screen resolution (among others), the price can easily double compared to the base configuration. . And most laptop buyers like to be able to configure the laptop according to their needs and budget. No problem with that. So why would it be a problem if the cars offer similar configuration options and price variations?

So in short, more choice for customers is something that we as customers should welcome. A wider range of the price range is good for customers. I see no problem with this trend.

Here is what Hellmet BHPian had to say about it:

I see this as a personally confusing trend. The cars now come with lots of gadgets and features, special editions and multiple engine options – NA, Turbo, CNG – and this splits the variant prices into 2-3 segments.

The top variant of Kia Carens, for example, is almost 2 times the base variant. The base variants are a lure to trick you into thinking the car is VFM, but in the workshop you’ll end up spending big bucks once you realize the base engine and feature list are terrible.

Also, for someone like me who prefers fewer choices, this strategy irritates me personally. For example, I was a fan of Apple’s simple product offering, but since they introduced a million iPad variants, I lost interest in the tablet. I have been away from the Indian car market and when I look at it now I don’t know what car segment I am looking at. Also, the fact that almost all new cars are now “SUVs” doesn’t help my stupid brain.

I still prefer Maruti’s simple pricing strategy and also why I like Punch’s pricing (for example) as it only has one engine and a handful of variants.

Here is what BHPian the rationalist had to say about it:

One thing I don’t like is not selling auto options in lower models, it’s like excluding a lot of customers from autos. The first company to equip the lower models with automatics is sure to get some really good numbers and some goodwill. Look at the sales of Volkswagen and Skoda, they sold the same number of cars in 2011 and 2021! Absolutely no improvement, in fact, sales were down! And still they hesitate to equip Slavia & Virtus 1.5 AT in the basic models. They really have a myopic view of the market. They think sales of high-end models will be affected, so be it. The higher the number of cars sold, the greater the visibility and the chances of loyalty when they are upgraded.

Check out BHPian’s comments for more ideas and information.

About Raymond A. Bentley

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