Car discounts sputter in Aug but set to regain speed: Who offers what

Anticipated strong festival demand in automotive industry may lead to reduced discounts for utility vehicles

Even as the festival season kicks off with Onam in the southern states, data indicates that car discounts have remained relatively flat on a month-on-month (M-o-M) basis.

The industry is anticipating robust festival demand, resulting in lower discounts for utility vehicles compared to the previous year.

Data compiled by Anand Rathi Research reveals that discounts for models like the Tata Harrier and the Mahindra XUV300 have declined by 38 per cent and 20 per cent year-on-year (Y-o-Y) in August. However, on an M-o-M basis, the discounts have remained flat.

In contrast, the A-segment or entry-level cars such as the Maruti Alto K10 and the WagonR have seen a sharp rise in discounts on a Y-o-Y basis. Nevertheless, M-o-M discounts for these cars have also remained flat.

A Maruti Suzuki India dealer said that he anticipates the A-segment cars to gain traction during festivals.

“The demand for these cars has been sluggish, and companies have been maintaining stable wholesale numbers through production. The kind of demand that materialises for A-segment cars will be critical,” the dealer stated, adding that festival offers could commence from September onwards.

However, for the Maruti Swift and the Baleno, discounts have only increased by 18 per cent Y-o-Y and remained flat M-o-M.

Overall, around 1.7 million passenger vehicles have been sold from April to August this year, and the industry projects the total sales for the financial year to reach around 4 million cars. Of these, approximately 1 million are expected to be sold during the 83-day festival period between August and November.

Industry inventory levels currently stand at the 300,000 mark, and dealers are augmenting their inventory in anticipation of festival demand. Onam has witnessed a 25 per cent Y-o-Y surge in demand.