Faced with a pile of unsold stock after a dull festive season, passenger vehicle makers are offering steep discounts and consumer benefits even for relatively newer models. The offers, which mostly include free insurance, exchange bonus, and free accessories, are valid till December 31. The offers come ahead of an impending price hike from January 1, 2019, announced by most manufacturers.
Passenger vehicle sales in India remained under pressure in November, with the industry posting a decline of more than 3 per cent in the same month - the fourth monthly decline in the industry’s dispatches to dealerships since July. A combination of factors, including high fuel prices, higher insurance cost, and firm interest rates, have been weighing on buyer sentiments.
To be sure, while discounts in December are not unusual as companies make way for New Year models, this year is out of the ordinary. Take car market leader Maruti Suzuki, for instance. Including the exchange bonus of Rs 25,000, buyers of the Baleno can get benefits of up to Rs 40,000. The model did not have any offer till recently. With the exception of the new Ertiga, there are attractive offers on all Maruti models.
“Despite best attempts, the stock is not moving. We are ready to cough up more to liquidate stock,” said a Mumbai-based Maruti dealer. A Maruti spokesperson did not respond to an email till the time of going to press. A similar, and in some cases even higher discounts, are seen on models from Hyundai, Honda Cars, Mahindra & Mahindra and others, said dealers.
“This time, the year-end discounts started from November onwards. People are pushing even more in December. Every carmaker is offering a higher discount this December than what they were offering last year,” said Rajesh Goel, senior vice-president and director, sales and marketing at Honda Cars India.
With exception of the Amaze, which has been topping the sales charts, Honda is offering attractive consumer benefits of up to Rs 100,000 across its model line-up. Goel conceded it is higher than last December. Even the City, which didn’t have any offer last year, is offering benefits of up to Rs 62,000 - this includes free insurance, exchange bonus, and accessories.
Others, too, are trotting out similar offers. Tata Motors, which has seen a steady climb in volumes in the recent past, is offering steep discounts. S N Barman, vice-president, sales, marketing and customer care at Tata Motors, said, the consumer offers on Tata cars have moved up marginally over the last year as inventory at the dealerships at 50-55 days is higher than the 40-day norm at this time of the year.
“The offers are the best so far, in the current fiscal year,” said Barman, adding it would help the company clock better sales in the last month of the calendar year. Barman expects the overall take-off however, to be subdued on account of liquidity issues facing some of the dealer partners.
“Owing to liquidity issues, they are finding it tough to lift stock from the factory,” he said. Most auto companies in India follow the cash-and-carry model.