'Middle class is being priced out of driver’s seat': CA calls out a rigged car economy
The market has shifted hard toward SUVs, which now make up more than 55% of all car sales. Hatchbacks, once the go-to for first-time buyers, are disappearing.
- Jun 28, 2025,
- Updated Jun 28, 2025 9:00 PM IST
India’s middle class is being priced out of its own aspirations. A decent car under ₹7 lakh? “Feels like a joke,” says CA Meenal Goel, whose LinkedIn post lays bare how taxation, regulation, and market trends have gutted affordability—even for the most basic models.
In her post, Goel recalls how her father bought their first family car for ₹3.5 lakh—a milestone for many Indian households at the time. Today, that same economic tier faces a bleak reality: the Toyota Fortuner costs ₹45 lakh in India, but only ₹30 lakh in Abu Dhabi. A Jeep Wrangler? ₹67 lakh here, around ₹30 lakh in the U.S. “Same cars. Same companies. Drastically different prices,” she wrote.
The root cause? Taxes. Cars in India attract a base 28% GST, plus a cess that varies by engine size and vehicle type—pushing total levies up to 50%. Imported cars face duties as high as 110%. “You’re not overpaying to make [car companies] rich,” Goel wrote. “You’re paying to keep up with systems, aspirations, and policies.”
It’s not just about taxation.
The market has shifted hard toward SUVs, which now make up more than 55% of all car sales. Hatchbacks, once the go-to for first-time buyers, are disappearing. Meanwhile, features once considered luxury—touchscreens, sunroofs, alloy wheels—are now expected as standard, silently inflating base prices.
Add to that rising input costs—rubber, aluminum, imported electronics—amplified by a weakening rupee and global disruptions, and prices swell further. Regulatory mandates like BS6 emission norms and compulsory safety features tack on thousands more.
Despite the perception, Goel points out, automakers aren’t making a killing. Most operate on margins of just 5–8%.
The takeaway is brutal: car ownership in India is no longer a stepping stone for the middle class—it’s a financial leap few can afford to make.
India’s middle class is being priced out of its own aspirations. A decent car under ₹7 lakh? “Feels like a joke,” says CA Meenal Goel, whose LinkedIn post lays bare how taxation, regulation, and market trends have gutted affordability—even for the most basic models.
In her post, Goel recalls how her father bought their first family car for ₹3.5 lakh—a milestone for many Indian households at the time. Today, that same economic tier faces a bleak reality: the Toyota Fortuner costs ₹45 lakh in India, but only ₹30 lakh in Abu Dhabi. A Jeep Wrangler? ₹67 lakh here, around ₹30 lakh in the U.S. “Same cars. Same companies. Drastically different prices,” she wrote.
The root cause? Taxes. Cars in India attract a base 28% GST, plus a cess that varies by engine size and vehicle type—pushing total levies up to 50%. Imported cars face duties as high as 110%. “You’re not overpaying to make [car companies] rich,” Goel wrote. “You’re paying to keep up with systems, aspirations, and policies.”
It’s not just about taxation.
The market has shifted hard toward SUVs, which now make up more than 55% of all car sales. Hatchbacks, once the go-to for first-time buyers, are disappearing. Meanwhile, features once considered luxury—touchscreens, sunroofs, alloy wheels—are now expected as standard, silently inflating base prices.
Add to that rising input costs—rubber, aluminum, imported electronics—amplified by a weakening rupee and global disruptions, and prices swell further. Regulatory mandates like BS6 emission norms and compulsory safety features tack on thousands more.
Despite the perception, Goel points out, automakers aren’t making a killing. Most operate on margins of just 5–8%.
The takeaway is brutal: car ownership in India is no longer a stepping stone for the middle class—it’s a financial leap few can afford to make.