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Maruti Suzuki cuts back on discounts as festive cheer drives sales

The average discount offered by the company during Q2 was Rs 17,300, well below the Rs 25,000 offered in the same period last year, when it was clearing BS-IV stocks

November 03, 2020 / 12:59 PM IST

Discounts on Maruti Suzuki cars fell 30 percent during the second quarter ended September compared to the first quarter, after pent-up and festive demand swept through inventories in showrooms.

The average discount on Maruti Suzuki cars between July-September stood at Rs 17,300, a sharp reduction from the Rs 25,000 per car offered between April-June. The second quarter last year also saw the highest-ever average discount per car offered by Maruti Suzuki, at Rs 25,761.

Speaking to analysts Ajay Seth, Chief Financial Officer, Maruti Suzuki India, said: “The average discount during Q2 was Rs 17,300. These were much lower than the same period last year, which is when we were clearing the BS-IV stocks and running schemes during the same quarter of over Rs 25,000 per vehicle.”

Other carmakers have not shared their discount details.

Sales rebound

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Entering the December quarter, discounts should come down further given the continued surge in demand. The Delhi-based market leader recorded a 27 percent jump in retail sales during the ten days of Navaratri and Dussehra. From around 76,000 units sold in retail volumes last year during the same ten days, Maruti Suzuki sold 96,700 units this year.

During the whole of October, Maruti Suzuki clocked growth of 18 percent in wholesale volumes. Inventories at its showrooms were sold to customers faster than expected.

Consumer benefit offers were in play during October too, with almost every model of every carmaker offered with a discount. With Diwali less than two weeks away, there has been a drop in discounts offered by Maruti Suzuki dealers.

For instance, the Dzire (petrol) compact sedan, which was available at a consumer benefit of Rs 55,000 earlier is now sold with a benefit of around Rs 40,000. The Swift (petrol) hatchback, which carried a benefit offer of Rs 50,000 is now available with an offer of Rs 35,000.

The biggest shakeup in discounting has been in the price of the Vitara Brezza. The compact SUV, which was available with a diesel engine last year, carried a discount of over Rs 1 lakh. The model’s petrol version now carries a discount of Rs 46,000. The diesel version has been discontinued.

First timers drive the show

Maruti Suzuki has become the biggest beneficiary of the Unlock phases since there has been a general consumer tendency to opt for personal mobility rather than use public transport. There has been a surge in the number of car buyers have who never had a car.

Nearly half of the buyers in Q2 were ‘first timers’ who opted for compact hatchbacks such as the Alto and Wagon R. Maruti Suzuki’s portfolio of small cars, which includes the Celerio, Swift, Eeco, and S-Presso, is among the biggest.

“The composition of first-time car buyers has certainly gone up during Q2 and at the same time repeat buyers have gone down,” Shashank Srivastava, executive director, sales and marketing, Maruti Suzuki, told analysts.

Maruti Suzuki does not have a product in the mid-size SUV segment, which includes best-sellers Hyundai Venue and Kia Seltos. This segment has seen strong growth in the past several quarters.



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Swaraj Baggonkar
first published: Nov 3, 2020 12:27 pm
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