Massive monsoon season discounts take the wheel in car sales drive

Car sales face pressure due to reduced footfall, triggered by the heatwave, and potentially lower consumer interest during the upcoming monsoon. In response, automobile companies and dealers have adopted aggressive strategies, such as keeping showrooms open late and offering massive discounts, primarily on entry-level vehicles.

According to a survey by the Federation of Automobile Dealers Associations (Fada), showroom footfall has decreased by at least 18 per cent due to the heatwave. Although the heatwave is subsiding in many parts of the country, companies like Maruti Suzuki India Ltd (MSIL) are extending showroom hours into the night.

As the monsoon season begins, carmakers and dealers are intensifying their efforts to attract buyers with various incentives, including discounts, exchange bonuses, and assured gifts.

This period, often marked by fewer auspicious days and unpredictable weather, typically sees a decline in vehicle purchases, prompting companies to offer deals to boost sales.

As the monsoon approaches, car dealerships across India offer discounts ranging from Rs 20,000 to Rs 4 lakh on various models. These discounts exceed those from the 2023 monsoon period due to rising inventory levels and reduced footfall caused by the heatwave.

Fada President Manish Raj Singhania says: “Discounts are higher this year than last year due to rising inventory levels. This means that not only will original equipment manufacturers (OEMs) be offering schemes, but dealers too will, to clear out stock. Last year, there were still shortages of vehicles and waiting periods, but now, most models and variants are readily available at dealerships. This translates into considerable discounts for consumers.”

Discounts are currently available on vehicles like the Alto K10 (Rs 40,000), S-Presso and WagonR (Rs 25,000-30,000), and Swift (Rs 15,000-20,000).

“During the afternoon, no customers want to visit showrooms. To promote our sales, we are focusing on evening strategies with extended working hours and having dealerships open late at night,” says Partho Banerjee, senior executive officer, marketing and sales, MSIL. “With monsoon coming and a likely good kharif season, we will see green shoots soon.”

Honda has introduced a monsoon campaign called Honda Magical Monsoon, offering benefits and assured gifts across its entire car range, including the Amaze, City, Elevate, and City e:HEV.

Customers who take delivery in July 2024 stand a chance to win a trip to Switzerland or prizes up to Rs 75,000, along with surprise gifts for test drives. The campaign, which runs from July 1 to July 31, is concurrent with ongoing monthly offers.

“The monsoon season brings a sense of freshness, and Honda’s special offers aim to amplify this experience for our customers. Whether you are upgrading your drive or buying your first car, a Honda is waiting for you with unbeatable value, and now is the perfect time to make that decision. This limited-time offer is available at all authorised Honda dealerships across the country,” says Kunal Behl, vice-president, marketing and sales, Honda Cars India.

Other vehicles receiving discounts from Rs 15,000 to Rs 65,000 include Tata’s Tiago, Altroz, Nexon, Punch, Harrier, and Safari, and Hyundai’s Grand i10 Nios, Aura, Exter, and Alcazar.

Singhania explains, while specific discounts can be unpredictable, dealers and OEMs often provide additional incentives during lean periods to stimulate sales. “The monsoon season, with its few auspicious days and unpredictable weather, can impact transportation and vehicle purchases, leading to higher discount schemes in July compared to the first quarter of the financial year.”

Singhania also highlights that most models are currently in stock at dealerships, with a few exceptions. Popular models like sport utility vehicles (SUVs) enjoy smaller discounts due to consistent demand, whereas entry-level cars and hatchbacks receive higher discounts. He confirms that discounts will continue ahead of the festival season, detailing a calendar that includes the rainy season, Shraadh period, and Ganesh festival in August and September, with October being an important month featuring Navratri and Diwali.

Regarding inventory levels, Singhania mentions that as of May these were high at 55-60 days but are expected to decrease to around 30 days during the monsoon. He emphasises the importance of aligning wholesale with retail levels to avoid excess inventory, which could harm dealership profitability, particularly during the slow month of July.

For the Baleno, they offer a cash discount ranging from Rs 35,000 for the petrol MT (manual transmission) to Rs 40,000 for the petrol AGS (auto gear shift). The Jimny’s discount varies based on the variant and availability through Maruti Suzuki Smart Finance (MSSF), from Rs 1 lakh for the Zeta without MSSF to Rs 2.5 lakh for the Alpha with MSSF. The XL6 offers a cash discount of Rs 20,000 for the petrol variant and Rs 15,000 for the compressed natural gas (CNG) variant, along with an exchange bonus of Rs 20,000 for petrol and Rs 10,000 for CNG.

Mahindra & Mahindra, under its consumer scheme, offers cash discounts and benefits on various vehicles. The XUV400 electric SUV offers discounts up to Rs 4 lakh, including cash discounts up to Rs 3.8 lakh plus accessories worth Rs 20,000.

The Scorpio-N models offer benefits ranging from Rs 60,000 to Rs 1 lakh, depending on the variant. The XUV700 AX5 models provide benefits from Rs 1.3 lakh to Rs 1.5 lakh, while the AX7 models offer up to Rs 1.5 lakh. Depending on the variant, discounts on the Bolero can reach up to Rs 69,000. For the Marazzo, total benefits can go up to Rs 73,000, including accessories worth Rs 20,000 and cash discounts of Rs 53,000.

For MG Motors, there are no discounts. However, for the top-end model, the MG Hector, consumers can receive a discount of Rs 20,000 from MG and an additional Rs 20,000 from the dealer, provided they take the dealer’s insurance. Additionally, if a consumer works for a multinational, they are eligible for a corporate benefit of up to Rs 10,000.