BHPian autohead115 recently shared this with other enthusiasts.

Ok, hear me out. I am torn between trying to choose a well put together car from Hyundai or going with Tatas that have noisy engines and jerky AMTs, or VWs that still don't feel as polished or nice (interior-wise) as a Kia/Hyundai; so I just wanted to understand the economics of using less steel/sheet-metal. Clearly our govt. is to blame for exorbitant taxes and no safety norms.

However, I wonder one thing, how much more would it cost to Hyundai or Maruti etc to make their car get at least 4 or 5 stars (ideally), I mean if Tata can do it with small cars as well (eg. punch), why can't Hyundai? If cars would cost 50K more to do so, I don't see why not, but does it cost a lot more? It's not like Hyundai is scared to price boldly, their top-of-the-line Creta is almost 23L OTR Bangalore now, I don't see people turning away if it costs 50-75K more. Can someone weigh in on this, what are the manufacturers thinking here?

Here's what BHPian for_cars1 had to say on the matter:

Manufacturers bring out vehicles with increased active and passive(structural) safety due to:

If there are more buyers who will go after "bling" factors rather than safety ratings and in the absence of adequate safety enforcement from Govt side, then it gives more incentive for OEMs to sell unsafe cars by giving few visible attractive features. On a large scale production, every bit of cost savings matter for the OEMs. Manufacturers are always thinking how to increase profits (ethically of course).

So points 1 and 2 listed above are key. If #1 is not in place, atleast buyers should ensure that only cars with high safety ratings are bought.

Here's what BHPian Raghu M had to say on the matter:

Biggest point to consider here is the regulations. Kia and other manufacturers abide by the laws in EU and other countries because the regulations mandate certain compulsory safety measures. In India, these manufacturers throw all of that out of the window and try to maximize profits. I think only the emission norms are strict here as we have a climate target to meet.

To put it simply, I don't think it will cost them a bomb to produce safer cars. They just don't want to do it because they are not obliged to do. You have a market for unsafe cars in India. They have the tech and R&D. It's all about utilization. How is TATA or for that matter M&M producing such safe cars at lower prices (compared to the Koreans - cost and maintenance)? To balance that, they add things like bigger infotainment screens, connected tech and bling. There is a occasional hue and cry about their crash test ratings but it hardly impacts their sales.

Here's what BHPian ron178 had to say on the matter:

It is worth keeping in mind the cost of development too. Developing a five star car would need extensive simulations, internal testing etc. right from the ground up. Unless built on a global modular platform (eg. Kwid & Latin American Clio) it is very hard to improve overnight and would take significant R&D investment and a whole product cycle.

In terms of production I hardly think it would cost much per car to the end consumer, I don't know, maybe someone from the industry could clarify. It is just a little profit per car which multiplies when there is large sales volume. Save (say) $100 per car on welding or hot-stamping and sell 10000 cars a month and you've saved a million dollars with the consumer getting no benefits. Manufacturers will only improve if there is regulation (eg. minimum legislation applied in India since 2019) or fear of losing sales (can be induced by bad publicity from consumer-testing eg. Kia) or if the manufacturer decides to use consumer-testing results as a sales strategy (eg. Tata, Mahindra, Renault-Nissan) or in the case of global manufacturers to avoid embarrassment (eg. VW, Toyota, Honda).

It's still best to remember that one test cannot define vehicle safety and there is no such thing called a 'structurally safe' car, a car that performs better structurally in any consumer crash test is likely to perform better in a small number of similar crashes with specific crash partners and not much more (though some media try to portray otherwise). It is a conscious decision made keeping consumer-testing in mind, no manufacturer builds 'inherently strong' cars.

Biggest point to consider here is the regulations. Kia and other manufacturers abide by the laws in EU and other countries because the regulations mandate certain compulsory safety measures. In India, these manufacturers throw all of that out of the window and try to maximize profits.

Not really, in terms of safety regulations India is now (since 2019) pretty close to Europe. We only don't have some of the later regulations, for example i-Size child seat anchorages, the ECE R135 oblique side pole test (introduced in Europe not too long ago) and intelligent speed assistance/AEB which I think come in next Wednesday in Europe.

The bigger reason manufacturers in developed markets try much harder is not regulation but to achieve a Euro NCAP five star/IIHS TSP rating which is much tougher than EU/US regulations. Though legally allowed a low rating can be a PR disaster and many fleet buyers also have a five-star-only policy. Sometimes even insurance companies refuse to insure cars that don't have a recent five star Euro NCAP rating. It's called 'pseudo-regulation'.

Hyundai have had a lot of negative press coverage over the past two years. There has been some subtle damage control on their part, for example in the i20 and Creta's GNCAP tests they shared all data required for the test unlike the i10 and Seltos, and they even sponsored testing for the Carens (presumably aiming higher). I am sure they are keeping the GNCAP/Bharat NCAP in mind while developing the next generation of products, just don't expect it to happen overnight because the Seltos (and twins) sold here is based on a completely different platform from the US/AU one so it would involve significant R&D and not just changing something on the production line. The i20 on the other hand could reach four stars with a different airbag or maybe even a software update.

I thought Seltos and Creta were all international models, and it just feels like they are skimping on sheet metal.

No the Seltos we get here is a short-wheelbase version of the Chinese Kia KX3 and not related to the 'original' Seltos codenamed the Kia SP2. The KX3 was originally developed as an LHD-only model which probably explains the pedal movement problems in the RHD version.

They sure look the same.

I wonder if someone sitting behind the desk and thinking, "hmmm, 50K INR of high tensile steel huh?

Costs probably far less than that. Also those UHSS members in the leaked BIW diagrams for the SP2 seem to be for the IIHS' small overlap test. The decision would have (vaguely generalizing here) probably sounded more like "the market for higher-rated cars in India is small so no need to invest in the R&D". Of course this was 2019 when the Nexon's result was still very new so hopefully they've learned since then although their history in Latin America suggests otherwise.

Here's what BHPian thanixravindran had to say on the matter:

Apart from the product BOM cost and R&D cost, the other important element is Capital expenditure related to the tooling and fixtures. It's not easy to swap out high tensile and ultra high tensile steel just like that in a tool.

Any product/project has to submit project financials at the early stages in the product life cycle development. BOM cost impacts the Gross margin as well influence the cash flow through cost of goods sold. So it is better to keep it as low as possible when the volume is fluid. R&D, expenses costs and capital expenditure costs influence the other financial parameters like payback, NPV and IRR which are also scrutinized heavily. R&D costs are typically expensed till development stage but capital expenditure is amortized and depreciated over the asset life which means they stay in the books of company and influence the P&L for years to come. So product companies are very careful about Capex and it is often set by the top management with strict approval and review rigor.

Once you complete the project, it is not easy to add any capital expenditure like new tooling to improve the product. It is very easy to plonk air bags in lower variants as inserts are already available in the top variant and hence no change in tooling.

Here's what BHPian IshaanIan had to say on the matter:

I am not an expert but I feel it is pretty straightforward. It's not about how much more it would cost to make a structurally stable car; It's about what can we sell and how much can we make on it. That is the mentality that is employed.

Let's say a manufacturer wants to launch a model that they already sell in other markets, here in India. If they are a manufacturer with a good reputation by which I mean reliability since that is most important in a country with cheap labor where maintenance will not occur well and roads will be horrible, they can strip away as much as they feel they can save on, and price it as high as they think they could sell it.

Now Tata is a company known for poor reliability in the consumer car sector, therefore they need to set themselves apart from the established brands. They achieve this through attractive design which is the easy bit, and back it up with some substance in the form of categorically safer cars since that is all they can afford to muster up at the moment as they have no solid petrol engines which would be way more expensive to develop. That's just what they know they have to do to not only pull customers away from the top players but to also make up for the bad reputation they suffer from.

Check out BHPian comments for more insights and information.

Keep yourself tuned in to the Indian automotive scene via Twitter, Youtube or RSS feeds.