A very well saying says, “You can sit around and wait for the good things to happen to you, you can go out and make them happen.” But not true for imported cars anymore, as customers will have to wait longer to buy an imported car with carmakers such as Honda, Toyota, BMW and Mercedes-Benz deciding to import vehicles only against confirmed bookings.  

The delivery time of three months or more is there for all the popular models like the Mercedes Benz’s SL-Class and SKL-Class sports cars, the BMW’s flagship sport utility vehicle (SUV) X6 and the 7-Series saloon, Toyota’s Land Cruiser & Prado, Mitsubishi’s Montero and Honda’s CR-V. 

Honda, the Japanese car maker has to stop the imports of its CR-V sports utility vehicle, once the largest selling petrol SUV in India due to the decreasing demand and fluctuation in currency rates. Now, the customers have to wait for nearly three months or more to get the car as it will be shipped to India against the confirmed orders from customers. Not even one vehicle of Honda was sold in the April-June period. 

Masahiro Takedagawa , president and chief executive of Honda Siel Cars India said that, “The changes in currencies have worked against imports. It led to an increase of almost Rs 3 lakh in the price of a CR-V forcing us to change our policy and to bring cars for a few guaranteed bookings”. 

Following the saem path, Toyota too, keeps its hot-selling Camry and its two SUVs, Prado and Land Cruiser, arrive in India only if the confirm customer booking is received as company is avoiding inventory buildup of SUVs priced at Rs 40-80 lakh. Sandeep Singh Deputy managing Director (marketing) Toyota Kirloskar Motors said that, “These vehicles are fully imported and carry a high custom duty. We avoid inventory at our warehouses or the dealer level”. 

The economy whirlpool in the word has affected the luxury car sale in India. These car ranges from Rs 25 lakh to Rs 1.5 crore. In order to buy the most expensive cars such as the Bentley and the Rolls Royce customers end up waiting more up to 6 months. Domestic market has seen a high depression in the sales of the high-value sedans and SUVs. These vehicles sale has gone downby 22% to 1977 units in the first three months of the fiscal year. 

Companies are already facing a critical situation by selling the inventory at a discount. A BMW India spokesman said that, “In past, we have sold piled up stocks at a discount. We are avoiding that situation now”. 

Mercedes Benz had put its M-Class, the sportier SL-Class and SKL-Class Cars for the ‘first orders and than imports’ profile. General Motors, an American car maker imports its Captiva SUV only when the full amount is received from the customer for the car.

Related Books:
Packard Motor Car Company, MA
California Car Company: An Active Learning Costing Case
Roy D. Chapin: The Man Behind the Hudson Motor Car Company

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Posted by Naresh Koshti on 11 July, 2009 5:08:47 PM IST #