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Cover Story - What kind of car should you be buying right now?

  • Aug 21, 2019
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The uncertainty in the automobile industry is at an all time high right now. Carmakers are having a hard time deciding what kind of product portfolio to maintain while buyers are having a hard time deciding what kind of product to put down their money on. 


 


The biggest example of the former is the fact that Maruti Suzuki has decided to stop selling diesel vehicles in India from April 2020 onwards, that is once the BS6 emission norms come into effect. French carmaker Renault has also decided to go down the same road. The reasoning of these two carmakers is that upgrading diesel engines to meet BS6 norms will be quite expensive, and once that happens, customers will stop seeing diesel as the more economical option. The upfront cost of buying a diesel vehicle will stop justifying the savings on fuel. Now let’s bring Hyundai into the picture. The Korean carmaker is the largest exporter of vehicles from India and the second largest domestic supplier of four-wheelers, behind only Maruti Suzuki. Hyundai has publicly revealed that they will continue to sell diesel vehicles once BS6 norms come into play. And carmakers like Honda, Ford and Mahindra have followed suit. It doesn’t take a genius to figure out that of either Maruti and Renault or Hyundai, Ford and Mahindra, only one party will be heading down the right road once BS6 norms come into play.


 


As for the latter, that is buyers having a hard time deciding what kind of car to buy, it is evident by the fact that the Indian automobile industry is facing one of its worst slumps ever. In fact, Maruti Suzuki’s total sales for the month of July 2019 has gone below the 1 lakh mark! Just as a benchmark, Maruti Suzuki sold more than 1.5 lakh vehicles during the same month in 2018. The company’s market share has continued to hover around the 50 per cent mark so that indicates that the problem is not only with Maruti Suzuki, rather the entire four-wheeler industry itself.


 


So that leads us to the question: if carmakers in India are divided on the future of the industry and car buyers have no idea what they should be buying, what is the way forward?


Well, this is the time for all car buyers to evaluate their own needs and pick a product based on that? How, you ask?


 


Well, for starters, lets get over the diesel conundrum. Diesel isn’t going anywhere as it is the lifeline of India. All the big trucks that run throughout the country use diesel as fuel and if the trucks were to come to a halt, so would the economy. And the government, while willing to take risks, isn’t ready for that to happen. So diesel fuel will be available in India for the foreseeable future. Now should you be buying a diesel car? Well, this is pretty much the best time for you to be buying a diesel car. Remember the transition from BS3 to BS4? Well, bikemakers were lining up with discounts back then to get rid of their inventory but carmakers did not face this problem back then and they won’t this time either. That is because they cleared their inventory well in time and were already selling BS4 compliant vehicles by the time the deadline came around. That will be the story this time too. All carmakers will have shifted to BS6 compliant cars by December 2019 or January 2020. Thus, the prices of their cars will go up as well, to offset the cost of making them BS6 compliant. Hence if you are waiting for the deadline of April 2020 to buy a diesel vehicle, don’t. Instead, if you know you will be running upwards of 100km everyday, especially on the highway, put your money down on a diesel car today, or in the coming months.


 


If you are a petrol person, you have time on your side. The conversion from BS4 to BS6 will make petrol cars more expensive too, but not as much as their diesel counterparts. Most cars that cost up to Rs 15 lakh will be upgraded to meet BS6 norms in the price range of Rs 30,000 to Rs 40,000. And while it maybe a good idea to invest in a petrol car right now to save some money, if you are looking for new models to come into the market, waiting it out won’t hurt your pocket too much.


 


Now we get down to the elephant that’s been in the room all this time: electric cars. Should you be an early adopter or should you wait for more options. There is no doubting the fact that electric vehicles are part of our future. Recently, Hyundai launched the Kona Electric in India and while Mahindra’s electric vehicles have existed in the market before it, the Kona Electric is truly the first long-range electric vehicle to be offered in our market. Its huge price of almost Rs 24 lakh will make many wonder if it is a good idea owning one. Well, it is if you have the money to spare and are looking to add a second or third vehicle to your garage that will primarily be used to go around the city. Due to the absence of an ICE (internal combustion engine), the Kona Electric’s maintenance will not be as expensive as that of a regular ICE car. However, the money you save there will still not be enough to justify the huge price tag of the car.


 


However, in the future electric cars will get cheaper as battery plants get set up in India and their price comes down. The battery pack is the single most expensive component of an electric vehicle, and once its price comes down, so will the price of electric cars. The next few years will see a bunch of new electric cars coming into the market with carmakers such as MG Motor, Maruti, Kia and many more are working on bringing an electric vehicle to our markers. Once the number of choices increase and a demand is created, the price of electric vehicles will go down gradually as carmakers look towards sourcing their batteries in India, or even better start manufacturing by themselves in India. Until then, sit tight if you are looking to buy an electric vehicle as the primary vehicle in your garage.

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