Despite heavy discounts, festive season fail to drive up vehicle sales

Despite heavy discounts from automobile manufacturers, customers don't seem to be excited this festival season, with sales during Onam and Ganesh Chaturthi, the beginning of the festival season, way below expectations, according to dealers. 

“The current season is definitely not as expected. One reason for sales not happening is expectation of the goods and services tax (GST) on automobiles being reduced on September 20,” said Ashish Kale, president of the Federation of Automobile Dealers Associations, 

According to reports, discounts offered were 10-25 per cent on sticker prices, depending on the model. In the past, such high discounts were usually offered in December, when automakers work with their dealers to reduce their inventory before the next year. These high discounts come against the backdrop of a fall in passenger car and two-wheeler sales. According to market sources, a dealer in Maharashtra registered sales of a mere 100 two-wheelers this Ganesh Chaturthi, compared to  1,200 in the same period last year.

Domestic passenger vehicle sales saw their worst monthly fall in August, slumping 31.6 per cent to 196,524 units, from 287,198 a year before. Two-wheeler sales last month declined by a record 22.2 per cent to 1,514,196 units.

These were due to many factors. One is the uncertainty that the scheduled introduction (from April 1, 2020) of BSVI emisison rules has created in the minds of customers. Among the questions are whether they should buy a cheaper BSIV version or a better BSVI variant when it comes. Many might also be waiting for a heavier discount closer to implementation of BSVI as dealers look at stock clearance towards March.

There has been confusion in the context of the central government push for electric vehicles; it has been mooting a deadline for a switch.