Amid gloomy sales carmakers put customers in driving seat

With passenger car sales in the domestic market set to veer in the negative territory for the first time in a decade, automobile manufacturers are lining up innovative offers to bring back footfalls in showrooms and cut down inventory levels which have touched record highs.

Topping the list is Tata Motors, which after recording a decline in volumes by over half in the last two months – have slashed by up to Rs 50,000 price of its Indica, Indigo and Manza range of cars. To lure in consumers, the company has additionally launched a unique buy-back programme for its Manza sedan offering buyers an assured 60% return on the purchase price of the car after three years.

As goes the small car Nano, Tata Motors have introduced a special scheme under which the consumers can swipe out with the car using credit cards of any one the five partner banks – Axis Bank, ICICI Bank, HSBC Bank, Kotak Mahindra Bank and Standard Chartered Bank. The move is aimed at making the vehicle available to the buyer with minimum hassles. The buyer will have the option to convert the entire amount into equated monthly installments (EMIs) at zero% interest over a period of 12 months. The EMI would be Rs 8,333 per lakh.

European car maker Volkswagen, which too has seen sales slide amid tough market conditions, is offering consumers the option of driving out with sedan Vento on payment of Re 1 while exchanging their old car. Customers have to pay the balance amount in full after a year or in equated monthly installments over a period of three years.

Group company SkodaAuto, in the meantime, is offering a deferred EMI option on the purchase of its C segment sedan Rapid. Skoda Finance is giving customers the chance to buy the Rapid on finance with the option of one year EMI holiday. The customer will have to pay only 15% of the price of the car as down payment for the vehicle.

An analyst at a leading advisory firm said, “While discounts and freebies have been on offer for most part of the year, car makers are now designing special schemes to increase conversion rates and turning footfalls into sales. The stocks in the industry are nearly double of normal levels and companies are taking a hit on inventory costs.”

Maruti Suzuki, which has over 100,000 cars in the supply chain, is for instance offering a one gram gold coin on booking its best-selling small car Alto800 and Alto K10. This is exclusive of benefits of up to Rs 43,000 on offer on the models in form of cash discounts, exchange bonus, discounted accessories. The total savings due to ongoing schemes go up to as much as Rs 53,000 on the WagonR while the Estilo is available for a special price of Rs 3.46 lakh.

Rival Hyundai is, in the meantime, offering interest rate of 0.99% on the i10. Even Honda is offering 0.10% interest on sedan City. “We had seen a similar trend in 2008. The cost of ownership has gone up and now companies are trying to partially off-set that by doling out benefits”, said Abdul Majeed, partner and leader (automotive practice), Pricewaterhousecoopers.