Who do you think goes out and buys a car?

Well there is no great detailed survey in India. It is in the US that you have extremely granular data about car buyers. So you can only guess what kinda people buy cars, right?

Well in a poorly sampled study they found that people with a TAKE home salary of Rs. 19,000 too there were car buyers!

Look at a case of a parent who has retired from a low paying job. For him a car was something that ONLY somebody 5 steps above him could afford. Or it was an honour to be given a car by the company. Well it was like that when he took up his first job in the 1980s.

Welcome bank financed cars – so literally anybody could afford it. Oh Really?

Well the parent has retired, so he has the money to make a down payment – FROM HIS RETIREMENT CORPUS. He has a house which he (bought for Rs. 1.3 lakhs) worth about Rs. 80 lakhs (feel good net worth!) and his children – one son (MBA of course!) earning about Rs. 4 lakhs and a daughter (MBA too!) earning about Rs. 3.8 L (parents add up the ctc I guess!) and the cash flow is a feel good cash flow.

So there is now a car in the house. Parents are beaming – because it is the first car in their chawl (well at least it was till 12 months back!), the children flaunt it among their friends. Picnics, parties, get together events are not complete without a mention -‘arre we could go …I can pick 4 of you…’

Am I cribbing? Heavens no.

Good for Hdfc bank, Tata Motors, Suzuki, ….sadly Hyundai is not listed in India…

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  1. Subra,

    I disagree on this point with you. Many of us don’t stay in Mumbai. In other parts of india its becoming unsafe to travel with family at odd hours on bike/public transport. Only safe option is to travel by car.

  2. car has become a status symbol now. if u dont have a car means you are looked down upon!!!!…. My colleague is having a salary as low as 12k and even he bought a car with EMI 8k. god only save him…..

  3. Have seen this scenario, and like Amrut mentioned, for non-Mumbai metros, it does matter. Even for a metro like Chennai, getting around on public transport is a pain (even with the autos now being metered).

    Anyway another reason this happens, is because the older parents expect a little comfort in their life now, and use their children to fund their own+children’s+societal expectations on what to have.

    Subra, it is very difficult to reject any demand from a parent, and children usually oblige by being coerced into thinking “Well, alls been well so far”

    If only societal “norms” or pressure were avoided, many people would be saving and not living off cards.

  4. For Mumbaikars Subras Input is absolutely Apt . We Rent A car on Need Base and Make use of Public Transport whenever possible .Even for Outside Metroes ,Subra never said dont take Car…all he is saying is Look at complete Picture . Even in chennai ,we can hire Taxi (I think Fast Track )any time .We dont have to worry about driving in Metro Mad Rush ,Pay Tolls ,Parking charges and Becomming angry on Petroleum Ministers …..Keep Life SIMPLE and Yet Efficient by using car when we require .Pleasure of driving a car atleast is Cheotic Trafic of BANGALORE ,DELHI,CHENNAI and even in Mumbai lost its Glamour Long Ago.Driving here is PAIN ……We have a collegue whom we are asking to Resign .He is on Contract in Lucknow….. and Organization decided not to Renew contract .SIMPLE !With a Take Home of 14k per month Now he is feeling Pinch and is under tremendous pressure to search alternative Job ASAP. He purchased Car on emi of 7k (Take Home 14k) just 3 months back….I think subra is driving this point.

  5. Outside of Mumbai and Ahmedabad, where do we have a reliable public transport service? BEST and BRTS both are v good, but what to do eleswhere?

    I relearnt driving because rickshaw fellows refuse short distance fares in my area.

  6. All,

    Do read again:
    “Am I cribbing? Heavens no.

    Good for Hdfc bank, Tata Motors, Suzuki, ….sadly Hyundai is not listed in India…”
    Subra sir is suggesting something..!!!!
    If you still din’t get it… then god bless you!!!!!!

  7. I Think more important point is expenses after u purchase a car. Maintenance and petrol does cost u a lot. And another thing take it from showroom n try selling it after few minutes, car will depreciate by 20% instantly. Few months later it will be 30% and year later 40%.
    Most people buy cars because they get frustrated by autos, public transport besides being a status symbol.

  8. Not sure if this is a good sign for the financiers (atleast the private ones without Govt. backing): when the car turns NPA, they’ll have to bear the brunt

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