Festivities are over, but not the season of freebies, at least when it comes to buying a car. Carmakers across the board are continuing to give away cash discounts and various gifts to attract buyers, as there is a need to clear the unsold stock at the dealership points by the end of the year, an industry source said.
Original equipment makers (OEMs) are collectively despatching around 3,25,0000-3,30,000 units of passenger vehicles (PVs) in November, which is just 1-2 percent lower than the wholesale figures for the same period a year back, industry estimates show. As per Vahan data, only 1,77,362 units of PVs have been retailed during the first 20 days of November.
According to the Federation of Auto Dealers Association (FADA), while the carmakers continued to ramp up their offtakes, auto retailers across the country were saddled with a 75–80-day inventory amounting to Rs 75,000 crore earlier this month. This has caused the season of freebies to last beyond the festive days until the end of the calendar year.
“Year-end discounts are a common tactic to clear out old stock, but this year, unusually high dealer inventories—hovering around 65-70 days—have triggered a wave of aggressive price reductions and significant discounts from OEMs, creating an exceptional opportunity for car buyers,” stated Puneet Gupta, of S&P Global Mobility.
Carmakers jack up discounts
There's nothing official about the freebies and goodies on offer as no carmaker has made an official announcement of the price cuts or discounts. A source in FADA told Moneycontrol that buyers can expect 20-30 percent discount on ex-showroom price of most of the models at the dealer points until December 31.
“Discounts are a function of the overall market conditions. If you have models in stock which are not selling where you have accumulated or produced far more stock than what you can sell, the only option is give larger discounts to get rid of those models,” Maruti Suzuki Chairman RC Bhargava said.
At its Arena showrooms, Maruti Suzuki India is offering a rebate of Rs 20,000-35,000 on the Alto K10, WagonR, Celerio and the S-Presso, Rs 25,000-50,000 on the Swift, Rs 10,000-20,000 on the Brezza (discount rates depend on the variants), according to dealers. This is in addition to a Rs 15,000 exchange bonus and Rs 2,100-2,300 corporate discounts (depending on the model).
At its Nexa outlets, Maruti is offering sops of Rs 40,000-50,000 on the Ignis, Rs 35,000-45.,000 on the Baleno, Rs 30,000-35,000 on the Fronx, Rs 20,000 on the Ciaz, Rs 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).
Hyundai Motor India Ltd (HMIL) has lined up a deduction of Rs 35,000-45,000 on its Grand i10 Nios, Rs 20,000 on the Aura (both petrol and CNG), Rs 20,000-45,000 on the i20, Rs 20,000-30,000 on the Exter (select variants), Rs 45,000-50,000 on the Venue (discount rates depend as per the variants), and Rs 70,000 on the Verna (all variants). There is an additional slash on the ex-showroom prices such as Rs 50,000 on the Tucson and Rs 2 lakh on the Ioniq 5 e-SUV.
Questions mailed to Maruti Suzuki and Hyundai Motor India remained unanswered till the time the story was filed.
Discounts of similar scale is on offer at Tata Motors. The company is giving away a cash discount of Rs 25,000 and Rs 20,000 on the Altroz and Punch (ICE version). Its Tiago hatchback, Tigor sedan and Nexon SUV are now available at a starting price of Rs 4.99 lakh, Rs 5,99 lakh and Rs 7.99, respectively, for ICE versions. It also unveiled a special 'Festival of Cars' campaign, offering significant discounts on the electric variants of Tiago, Tigor, Nexon and Punch. A Tata Motors spokesperson maintained that the company is continuing with the scheme that was launched in September.
All these offers are in addition to the Rs 20,000 (depending on the model) discount offered to customers trading in their older vehicles and Rs 3,000 as corporate discounts (on select models), dealer sources said.
Mahindra and Mahindra (M&M), on its part, is giving away limited offers on select variants of some models, subject to availability. There is a cash discount of up to Rs 70,000 on Bolero Neo, Rs 50,000 on Scorpio N, Rs 1.25 lakh on Thar 4x4. Its XUV4OO Electric attracts a cash discount of Rs 3 lakh. The M&M spokesperson is yet to respond to queries sent by Moneycontrol.
Other carmakers like Honda Cars India, Jeep India, Skoda Auto India, and Volkswagen India, are also resorting to heavy discount offers to clear their year-end stocks.
According to FADA, the marriage season and ongoing promotional offers are expected to keep up the momentum for passenger vehicles. “There are apprehensions, though, about potential slowdowns caused by customers deferring purchases in anticipation of steeper year-end discounts. We also urge OEMs to further rationalise the supply,” said FADA President CS Vigneshwar.
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