Tata Motors, Ashok Leyland dealerships offer steep discounts on trucks

Tata's closest rival, Ashok Leyland, has stated that it will not be relying on discounts to expand market share

Trucks of top companies like Tata Motors and Ashok Leyland continue to be sold at steep double digit discounts at dealerships in spite of claims by manufacturers that they will not take this route to grow market share. Sales of these trucks, which form the medium and heavy commercial segment, have perked up in the last couple of months after months of decline.

Business Standard visited some dealerships in Mumbai to find out the discounts and offers that dealerships of leading truck makers are ready to give for sales. A dealership of the country’s biggest truck maker, Tata Motors, is offering a hefty discount of as much as 16-17 per cent on the LPT1613 model of truck. On an ex-showroom price of Rs 19.83 lakh for Mumbai, the dealership is willing to forego an amount of Rs 3.25 lakh. The deal can be sweetened further if a customer opts for financing the vehicle with Tata Motors Finance (a subsidiary of Tata Motors).

Similarly, the LP 2518 heavy-duty truck is being sold with a discount of Rs 3.80 lakh, which can be stretched further to Rs 4.05 lakh. The ex-showroom Mumbai price of this model is Rs 23.86 lakh. It is obvious that dealers who enjoy a margin of just three per cent on this product cannot offer such discounts from their pocket. The company has been denying such discounting. However, the discounts have a role to play in the standalone losses reported by the company in last few quarters.

Tata's closest rival and now also the most profitable medium and commercial vehicle maker in the country, Ashok Leyland, has stated that it will not be relying on discounts to expand market share. But a company dealership in Mumbai is offering a discount of Rs 3 lakh on the Ecomet 1214 truck model, which is priced at Rs 19.33 lakh (ex-showroom, Mumbai). There are high double-digit discounts on other models as well. According to sales executives at the dealership, discounting has become a norm now. Tata Motors is discounting to regain the market share that it lost in recent years while Ashok Leyland is keen to consolidate the gains it has had in recent years.

When Business Standard spoke to Tata Motors in this regard, a spokesperson from the company reaffirmed that they are not trying to regain lost market share by offering discounts. “We at Tata Motors do not believe in buying market share by offering steep discounts. As the market leader, our focus remains to continuously improve and upgrade our products. Business turnaround at Tata Motors has been on the back of product portfolio and strong customer engagement,” said a spokesperson from the company.