With the pent-up demand for Passenger Vehicles (PVs) on the downswing, carmakers are increasingly going for discounts, exchange offers and hefty price cuts to entice buyers.
According to industry observers, the slowdown in car sales and a massive stockpile of unsold cars are the key reasons behind such schemes.
PV retail sales in June fell 6.77 percent year on year and 7.18 percent month on month to 2,81,566 units while inventory levels reached an all-time high, ranging from 62 to 67 days.
According to the Federation of Automobile Dealers Associations (FADA), the pre-monsoon period of May, June, and July traditionally witnesses a dip in automobile sales. In response to this seasonal trend, OEMs and dealers introduce various promotional programmes, including discounts, offers, exchange offers, money-back schemes, and vouchers.
“These initiatives play a crucial role in stimulating market demand during these months. The collective efforts of OEMs and dealers in rolling out these promotions are greatly appreciated, as they contribute significantly to sustaining sales momentum during an otherwise low period,” Manish Raj Singhania, President, FADA, said.
To be sure, discounts and other benefits were already being offered on compact cars and sedans, and they have recently been extended to hot-selling Sports Utility Vehicles (SUVs). For the last few months, car dealers have been offering cash discounts ranging from as low as Rs 10,000 and going up to Rs 3.3 lakh, depending on the price points of the models. This is in addition to the affordable variants that carmakers are introducing to lure buyers.
Maruti Suzuki India
Maruti Suzuki India Ltd, which slashed the prices of the automatic transmission variants of its compact cars, is offering discounts across its lineup. Across its Arena showrooms, the company is offering a cash discount of Rs 10,000 on Brezza Automatic, Rs 30,000-40,000 on Alto K10 Rs 35,000-40,000 on S-Presso, Rs 15,000-35,000 on WagonR , Rs 35,000-40,000 on Celerio (depending on the variants), Rs 10,000 on Eeco, and Rs 10,000-15,000 on Dzire, as per dealer sources.
This is in addition to a Rs 10,000-20,000 exchange bonus and Rs 2,000-3,500 corporate discounts (depending on the model).
Maruti Suzuki is also offering a cash discount of Rs 35,000-40,000 on Ignis and Baleno, Rs 22,500-35,000 on Fronx, Rs 20,000 on Ciaz, Rs 20,000 on XL6, Rs 30,000-50,000 on Grand Vitara (both mid and strong hybrid) and Rs 3.3 lakh on its only lifestyle off-roader SUV Jimny across its Nexa chain of outlets. 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 dealers are also providing an additional scrappage bonus of Rs 5,000.
Hyundai Motor India
Hyundai Motor India Ltd (HMIL) is offering a discount of Rs 10,000-30,000 on the Aura (both petrol and CNG), Rs 15,000-35,000 on Grand i10 Nios (depending on the variant), Rs 20,000-35,000 on i20 (as per the variant), Rs 15,000 on Verna, Rs 55,000 on Alcazar, Rs 50,000-2,00,000 on Tucson, and Rs 2,00,000 on Kona (discontinued). Of late, its bestselling SUVs such as 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 on exchange customers and Rs 3,000 as corporate discounts, 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 is offering a cash discount of Rs 25,000-35,000 on Tiago, 25000-30,000 on Tigor, Rs 15,000-25,0000 on Altroz, Rs 20,000 on Nexon, etc, as per dealer sources. Customers can also avail a cash benefit of 75,000-85,000 on the electric variants of Tiago and Tigor and up to Rs 1.1 lakh on Nexon EV. The discounts are in addition to the Rs 10,000-30,000 exchange benefits and Rs 3,000-8,000 corporate discount (depending on the model).
Mahindra & Mahindra
Mahindra, which recently slashed XUV7OO’s prices by up to Rs 2.2 lakh, is offering a cash discount of Rs 90,000 (including an exchange bonus) on Bolero Neo and Rs 1.5 lakh on the XUV 4OO. Dealer sources revealed that there are some limited offers on select variants of Thar and Scorpio-N in select cities subject to availability. However, there are no offers on the newly available XUV 3XO.
“Elevated stock levels indicate a pressing need for dealers to liquidate existing inventory. Concurrently, consumer urgency to purchase remains low as they anticipate better deals and upcoming models. This scenario is poised to trigger even fiercer pricing strategies and aggressive sales tactics in the near term,” said Puneet Gupta, Director, S&P Mobility.
Meanwhile, the automobile industry is hoping for the revival of monsoon and for sales to rebound strongly, marking a significant contribution to sustained sales momentum.
“The last two years have witnessed a good sales momentum in the automobile industry, and on a high base we expect the growth to be in a single digit," said Singhania from FADA.
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