Tata Motors on Wednesday created ripples in the compact sedan market pricing its Tigor strikingly less than the market leader Maruti Suzuki Swift Dzire.
The base variant of the Tigor is priced at Rs 4.7 lakh (ex-showroom, Delhi), Rs 65,000 less than the Dzire available at Rs 5.35 lakh. But a closer look at the pricing strategy adopted by Tata Motors shows that the base variant is priced chiefly to attract buyers than to churn sales.
In the case of Tigor, the pricing gap between the base variant and the next variant is unusually wider. When compared to other models the gap remains the biggest in the segment, save for Ameo from Volkswagen.
To better explain this the petrol XE variant (base variant) of the Tigor is priced at Rs 4.7 lakh while the immediate next variant XT is priced at Rs 5.41 lakh (ex-showroom, Mumbai), a whopping gap of Rs 71,000.
A like-to-like comparison in the Honda Amaze shows a pricing difference of just Rs 47,000 between the base variant and the immediate next variant while for the Ford Figo Aspire it's Rs 50,000. For the segment best-seller Dzire the difference is Rs 63,500.
Tata Motors is offering body coloured door handles, LED turn indicator, rear power outlet, Harman infotainment system, Bluetooth, ABS to name a few in the XT variant. Tigor’s prices are introductory in nature and will be revised in due course.
Market experts say that aggressive pricing always hits the buyers' psyche irrespective of whether the buyer actually ends up buying the product or not.
“If there is a lesser priced product compared with the benchmark then everyone will at least consider it once. So for the manufacturer it’s like a minor victory as his product has at least made it to the probable list and brought the buyer to his showroom,” said a market analyst.
According to car manufacturers at least 70 percent buyers across segments chose the middle or top-end variant after evaluating the variety of features on offer. These higher-end variants include creature comforts like rear air conditioning, charging pods, infotainment/music system or safety features like airbags and ABS.
Following aggressive sales pitches at showrooms the consumer is usually seen opting for a higher variant than what he/she had earlier zeroed down to.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
