Reasons behind the growth of Automatic cars in Urban India

Author: Monica Rao

The Indian diaspora in western countries uses mostly automatic cars for the convenience and the stress-free driving that comes with operating the car. However, till recently very few of them used to buy an automatic car in India for their family members. Typically, the Indian culture gives a premium value to the child taking care of their elderly parents. The first thing that most children settled abroad would do is present a car to their parents as a thanks giving.

But recently, increasing number of automatic cars are being purchased in India.  Firstly, it is because newer types of gearless cars are being introduced called variously as Auto Gear, CVT or even the traditional automatic.

why auto transmission cars didn’t become popular in India?
When it comes to buying a car or even inquiring about one, the foremost thing that comes to customer mind is fuel efficiency. Earlier, the thing that used to demoralize anyone thinking of purchasing an automatic transmission was lower fuel efficiency and high manufacturing cost than manual transmissions. This is very significant in India which has one of the highest prices for gasoline or petrol in the world.

Fuel economy
Diesel is used by commercial vehicles that are involved in the transport of various consumer and industrial goods. Hence, India used to keep the prices of diesel low when compared to petrol. While in most developed countries the prices of both are about the same. Indian regulators have been averse to increasing the price of diesel because that would lead to inflation of the consumer products. This has immediate negative impact on the political party in power and with some state always ready to go to polls, this would be political suicide. The result was increasing price of petrol and lower prices for diesel.

The fuel economy of diesel cars are substantially better typically at least 50% more fuel efficient. So when the automatic cars have 10-20% lesser fuel efficiency than the manual petrol cars, the customers didn’t show much curiosity to buy an automatic petrol car.

Car design
The auto transmission cars that are offered by international car manufacturers operating in India have design suitable for developed countries where car remains in higher gears because of good road and traffic conditions. The fuel economy will also be more in there because the traffic goes at constant speed without many down-shifts. However, it is quite different in India, where the AT keeps going to lower gears because of poor traffic and roads, and eventually gives very poor mileage.

However, with the recent new generation of gearless cars, this issue is mostly solved and the fuel efficiency is about the same as the manual transmission.  This has encouraged new car buyers to consider the gearless transmission cars.  It helps that the newer transmissions are substantially cheaper than the traditional automatics.  The main grouse earlier was that the automatic cars were not only substantially expensive but also significantly less fuel efficient. One of the reasons that the gearless cars were expensive is that the tax structure in India is not favorable to keep the car costs low.  Since the car is treated as a luxury item it is taxed at a substantially higher rate that increases the cost of the same model car in India substantially to an advanced country let us say the USA. Since the newer types of automatics are less expensive the overall cost also comes down substantially since the tax amount is also very less correspondingly.

Growth of Auto Transmission cars

  • One of the big driving forces behind the growth of the automatic cars or gearless cars in India has been the increase of traffic in urban India. The commute to work in Indian cities has badly worsened due to tremendous increase in vehicle density.  In such stop and go traffic, driving a manual transmission has become a punishment.  With many spending over one hour each way in such traffic, the need to opt for gearless transmission has been felt.  Car manufactures have cashed in on this need, by smartly offering many models in auto gear or gearless versions.
  • Many well to do Indians are used to having domestic help.  A driver is also routine in many well-heeled Indian families, but rising aspirations have increased the price of the drivers salary.  The rising cost of drivers has also made people opt for the gearless vehicle.
  • The commute in urban India is not necessarily far in terms of number of miles, but it is tough in terms of the time of commute. The increasing difficultly of driving a manual transmission has made the gearless car a breath of fresh air or a big relief for urban commuters. The fuel cost is becoming increasingly smaller portion of the drivers’ wage.
  • With automatic car, the need for a driver is greatly reduced as the car is much more comfortable to drive even in congested traffic.  This realization is making increasingly more customers opt for automatic or gearless cars in India.

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