A YouTube video from the channel of CA Sahil Jain explained that Toyota only earns Rs 45,000 on every Fortuner it sells in India, while the government earns Rs 18 lakh.
Despite various challenges faced by the automotive industry, we have seen the demand for new cars increase in recent times. Manufacturers are using this opportunity to increase their profits, which has led to an increase in the cost of owning a vehicle. However, there is a significant difference between the actual price of a vehicle and the ex-showroom price taken by the carmaker from the customer. In a YouTube video from the channel of CA Sahil Jain, the math behind the margins incurred by the parties involved and the cost paid by the customer for a vehicle is explained.
The video explains that the costs paid by the customer of a vehicle are divided into three different parties – the manufacturer, the authorized dealer, and the government (both Central and State included). Contrary to popular belief, the manufacturer receives the least amount of the total cost. The presenter uses the example of a Toyota Fortuner, whose ex-showroom price is Rs 39.28 lakh. The customer ends up paying an on-road price of Rs 47.35 lakh, including all taxes and insurance costs. Toyota, in this case, earns only Rs 35,000-40,000.
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