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Dec 08, 2012, 01.26 PM IST | Source: Moneycontrol.com

Discounts galore as festive season fails to cheer auto cos

Its that time of the year, when auto companies roll out huge discounts and promotions to lure customers to loosen their purse strings. Its more so this year as the festive cheer of Diwali bypassed most passenger vehicle makers last month.

Nachiket Kelkar
Moneycontrol.com

Its that time of the year, when auto companies roll out huge discounts and promotions to lure customers to loosen their purse strings. Its more so this year as the festive cheer of Diwali bypassed most passenger vehicle makers last month.
 
Typically, every December, auto companies offer discounts to clear out old inventory (2012 stock) as new model year vehicles enter the market from the January. Also, several companies hike prices from the new year.

This time around Maruti Suzuki , India's largest passenger car maker, has hiked prices up to Rs 20,000 from January. Others like Toyota and General Motors are expected to raise prices by around 1-2 percent. Foreign currency fluctuations is one of the reason being cited by companies to raise prices.

Auto makers hope that this price hike announcement will hasten car purchases in December following a mixed November.

Maruti's sales in November rose 12 percent year-on-year to 1.03 lakh units and Mahindra & Mahindra reported 18 percent growth at 48,143 units. However, rival Tata Motors saw a 13 percent decline in sales, with passenger car sales plunging 35 percent. Elsewhere, India's second largest PV company Hyundai's sales slipped 2 percent and Toyota Kirloskar's sales were down 26 percent. Among the top four two-wheeler makers only Honda Motorcycle & Scooter India reported a sales growth.

There were clearly no fireworks this festive season, so the hope that customers will splash the cash with the deals on offer.

Among car makers offering discounts, Hyundai has rolled out December delight, where customers can save up to Rs 53,000. Tata Motors is offering benefits of up to Rs 70,000, and it promises great exchange offers and down payments from Rs 15,000. Ford recently had a midnight sale (8am-midnight), offering savings of up to Rs 25,000 on Figo, going up to Rs 81,000 on the Endeavor, plus assured gifts.

One can definitely save more right now. But bare in mind, you will get a 2012 vehicle if bought in December, while 2013 model vehicles are just month away. When you go back and resell the car down the line, the model year does make the difference and a 2013 vehicle will definitely fetch a higher price than 2012 model.
 
Furthermore, several cars will go through the usual refresh next year. For instance Fiat's Punto and Linea are certainly getting a refresh. Then there will also be new launches like Honda's much talked about Brio Amaze sedan.

 So its going to be a choice between more savings now or more returns on resale.

  nachiket.kelkar@network18online.com

Maruti Suzuki stock price

On September 19, 2014, Maruti Suzuki India closed at Rs 3084.95, up Rs 39.20, or 1.29 percent. The 52-week high of the share was Rs 3098.05 and the 52-week low was Rs 1341.80.


The company's trailing 12-month (TTM) EPS was at Rs 96.45 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 31.98. The latest book value of the company is Rs 694.45 per share. At current value, the price-to-book value of the company is 4.44.

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