Comparing a Mahindra XUV700, Skoda Kodiaq & a BMW X3, the SUV from the Indian brand is the most affordable & also offers the most features.
BHPian AKB recently shared this with other enthusiasts.
Wanted to share a unique trend I am witnessing in the Indian market currently
How cars across segments are challenging each other and cheaper cars (relatively) are coming out better!!! This was not the case till about 18 months back.
Please see the comparison of Mahindra XUV700 AX7 L vs Skoda Kodiaq L&K vs BMW X3.
- The price difference amongst all three cars/automobiles is 20-25L.
- All three have comparable power (200-250BHP) and performance
- Size and stance are more or less comparable. We can always argue that XUV700 is over-designed (like all M&M, except the Thar), Skoda is understated, estate-like and X3 is Classic. However, there is nothing wrong with either of the styles
- Surprisingly, the cheapest has the most features. XUV has ADAS, Adaptive Cruise Control that the other two don’t get.
Questions that arise are:
- Are we seeing a point of inflexion where brand and build quality matter but don’t matter enough to pay 20/45L extra
- The M&M and Tata’s will become segments leaders and will bring masses to the Rs 20-30 lakh segment.
- Hopefully arrogance of supposedly high-end manufacturers will reduce.
Here’s what GTO had to say on the matter:
I have always maintained that no one needs to spend over Rs 20 – 30 lakhs on a car, no matter what your requirement. Anything over that is an entirely discretionary spend driven mainly by desire. Not just today, but in the last 5 years, we have seen some pretty darn competitive cars under 30 lakhs. Be it the 138 BHP Creta that is fast + dynamically sorted + loaded with kit, Innova Crysta (especially in the 2.8L AT guise), Hexa, 5th-gen Honda City (comfier than a C-Class), XUV700 (Mahindra hit it out of the park), MG ZS EV & Astor, Skoda Octavia (killer car), Kia Carnival etc.
You can now get seriously good machinery for 20 – 30 lakhs. This wasn’t the case a decade ago when choices were limited, all the action was
Here’s what BHPian CarNerd had to say on the matter:
Brand and build quality matters and people are ready to pay extra for the STATUS that comes with a particular brand. If not, Rolls-Royce, Bentley, Porsche, Ferrari, etc wouldn’t be profitable. This applies to all segments like clothing, electronics, etc.
That is because of Inflation. What used to be a Rs 5-6 lakh car 15 years ago is now around Rs 10-12 lakhs. A Mercedes Benz S-Class used to cost around Rs 75 lakh in 2007, It’s now about Rs 1.7 Crore.
It’s not arrogance, it’s business. They have built their brands over the years and they have positioned themselves above the others. The concept of one size fits all doesn’t work here. When companies think that they don’t need to change because they are segment leaders, that is being arrogant. There are mass-market leaders like Hero, Maruti, etc who are very slow in introducing new technologies because they are the leaders!
The thing which every business should concentrate is on customer delight. That would differentiate a good company from a great one.
Here’s what BHPian Shreyans_Jain had to say on the matter:
The Law of diminishing returns is catching up in the premium end of the Indian car market. On one hand, cars in the 18-30L rupee segment have upped their game spectacularly. Be it design or build quality or powertrains or features, carmakers led by our desi duo have pushed boundaries. They have even learnt how to develop sorted suspension setups, a most difficult thing to accomplish.
On the other hand, premium segment cars have seen their prices increase exponentially, but changes to their products have been evolutionary at best. Take a 3 series of today and a 3 series of 8 years ago. They look similar, feel similar, drive similar, have similar powertrains. The same 2-litre diesel. You’ll get things like bigger screens and Android Auto and digital instrument cluster and fancy new headlamps, all incremental upgrades. The cost of the car has more than doubled. Ditto for the 5. Then there are brands like Audi, whose apple cart has actually rolled backwards.
Net net, between massive improvements in the sub 30L cars and relative stagnation in the segment above it, any decision to spend the extra cash is effectively based only on brand perception and personal choice. Car for car, the premium is no longer justified.
Here’s what BHPian sunikkat had to say on the matter:
Brand value plays a big role for many people as they go up in their life cycle. It’s not only in cars but in almost everything. Take the example of clothing – a brand like Levis offers almost everything in casual clothing with good quality too. But still, there is a good demand for high-end brands like Emporio Armani, Gucci etc. Now only differentiator between these is the brand value.
So when people grow in their life stages, the brand value plays a major role and when they have a budget of 50 lakhs wouldn’t think of Mahindra against the available options, though Mahindra might be providing more features, similar powertrain etc. The differentiator will be the luxury quotient which will be clearly visible too – say XUV700 vs Kodiaq vs X3.
PS: I am not generalising here and there will be many people who can easily afford many high-end brands but prefer the ones that offer value. Also, I personally feel, in today’s scenario, any car above 10 lakhs is not a want but a desire (as GTO mentioned in the previous post). And this will be different for different people – for a few even cars itself is a desire.
Keyword: Today's Rs 20-30 lakh cars more VFM than premium models