Carmakers are aggressively wooing buyers with exchange offers, cash discounts and price cuts to boost sales ahead of the festival season while simultaneously scaling back despatches to dealers to match tepid demand.
With surging inventory levels at dealerships, despatches by passenger vehicle (PV) makers to dealers saw a 2.38 percent drop to 3,52,500 units in August compared with 3,61,123 units in the year earlier. This is the second consecutive decline in car wholesales this fiscal after July's dip.
Car dealers have been offering cash discounts ranging from Rs 10,000 and going up to 2.5 lakh for the past few months, depending on the price of the model. This is in addition to manufacturers introducing stripped-down or basic models to improve affordability.
According to Federation of Automobile Dealers Associations (FADA), carmakers are offering discount rates in the range of 10-15 percent of the price of the model during this month. The auto retail body noted that Original Equipment Manufacturers (OEMs) are looking for higher vehicle registrations from Ganesh Chaturthi (September 7) onwards.
As FADA president Manish Raj Singhania puts it, “Discounts were bound to come in as now it’s a demand-driven market. Unlike last year, the waiting period of bestselling models has come down. The higher the stocks at the dealerships, the more discount offers are introduced by OEMs. Above all, many customers prepone their purchases due to high discount offers.”
In his view, OEMs coming forward and extending that benefit to the customers is a “very good approach”. “The customer looks for a value proposition towards a particular product,” noted Singhania, adding, “By reducing the prices, OEMs are also looking to derive the maximum benefits from the festive season. In the process, they are extending their customer base so that they can retail better numbers.”
Maruti Suzuki India
Maruti Suzuki India Ltd, which slashed the prices of select variants of the Alto K10 and S-Presso, is now offering discounts across its lineup. At its Arena showrooms, the company is offering a cash discount of Rs 10,000 on the new Swift and Brezza, Rs 30,000-40,000 rebate on the Alto K10 Celerio and S-Presso, Rs 15,000-30,000 on the WagonR (depending on the variant), Rs 10,000-15,000 on the Eeco and Dzire, according to car dealers. This is in addition to a Rs 15,000 exchange bonus and Rs 2,100-2,300 corporate discounts (depending on the model).
The price drops extend to its premium Nexa showrooms as well. Maruti Suzuki is offering a cash discount of Rs 30,000-35,000 on the Ignis, Rs 25,000-30,000 on the Baleno, Rs 20,000-30,000 on the Fronx, Rs 15,000 on the Ciaz, Rs 15,000-20,000 on the XL6, Rs 25,000-50,000 on the Grand Vitara (both mid and strong hybrid) and Rs 1.95-2.5 lakh on its only lifestyle off-roader SUV Jimny. This is in addition to an exchange bonus of Rs 10,000-15,000 and Rs 2,100 rural and Rs 3,100 corporate discounts (depending on the model).
Some Nexa dealerships are also providing an additional bonus of Rs 5,000 for scrapping obsolete vehicles.
Hyundai Motor India
Hyundai Motor India Ltd (HMIL) is offering a discount of Rs 25,000-35,000 on its Grand i10 Nios (depending on the variant), Rs 10,000-30,000 on the Aura (both petrol and CNG), Rs 20,000-35,000 on the i20 (as per the variant), Rs 20,000 on the Exter (select variants), Rs 35,000-45,000 on the Venue (as per the variant), Rs 25,000 on the Verna (all variants), Rs 55,000 on the Alcazar (pre-facelift version), Rs 50,000-2,00,000 on the Tucson and Rs 2 lakh on the Kona EV (which is being phased out). Of late, its bestselling SUVs, such as the Exter and Venue, are also seeing a cash benefit of Rs 10,000 and Rs 35,000-45,000 (depending on the variant), respectively, as per dealer sources.
This is in addition to the Rs 10,000-30,000 (depending on the model) offered to customers trading in their older vehicles and Rs 3,000 as corporate discounts (on select models), revealed dealer sources. It was also clarified that no discount offer was applicable on the premium SUV Creta, which commands a huge waiting period.
Tata Motors
Tata Motors is offering a cash discount of Rs 25,000-3,000 on the Tiago, 25,000-30,000 on the Tigor, Rs 15,000-25,000 on the Altroz, Rs 15,000-20,000 on the Punch and Rs 20,000 on the Nexon, among others, dealer sources said. Customers can also avail of a cash benefit of Rs 10,000-30,000 on the electric variant of the Punch, Rs 10,000-50,000 on the Tiago.EV, and up to Rs 1.8 lakh on the Nexon EV. The discounts are in addition to the Rs 20,000-50,000 exchange benefits and Rs 3,000-8,000 corporate discount (depending on the model).
Mahindra & Mahindra
Mahindra and Mahindra (M&M), which recently slashed the XUV7OO’s prices by up to Rs 2.2 lakh, is offering a cash discount of Rs 85,000 on the Bolero Neo and Rs 50,000 on the XUV 4OO. Dealer sources revealed that there are some limited offers on select variants of the Thar and Scorpio-N in select cities, subject to availability. However, there are no offers on the newly available XUV 3XO.
“Realigning wholesale with the Vahan system will assist in reducing channel stock, but it could negatively affect growth. As a result, car manufacturers may resort to offering significant discounts to clear out inventory, thereby minimising the impact of aligning with retail sales," said Puneet Gupta, director, S&P Mobility.
He added, “From a customer's standpoint, this creates an ideal opportunity to purchase a car, as nearly all OEMs in India are expected to offer substantial discounts/offers. It’s monsoon time for the Indian car market.”
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