Demonetisation impact: Luxury car brands lure buyers with up to 20% discount

Facility of zero down payment and low interest rates are on offer as brands want to clear the inventory before next calendar year begins

Luxury cars have turned slightly affordable, thanks to demonetisation. Top luxury car brands such as Audi and BMW are offering steep discounts of up to 20 per cent on vehicles to clear the inventory before next calendar year begins.

Dealers of three leading luxury car players in the country are offering discounts ranging between Rs 3 and 9 lakh on a number of models where there is a pressure to clear inventory. Audi has rolled out a 'rush offer' on at least five models- A3, A4, A6, Q3 and Q7. The discounts on these range from Rs 2.6 lakh to Rs 8.75 lakh. In addition to these, the company's dealers are offering a six-month EMI holiday and zero down payment facility.

The domestic luxury car market, estimated at about 32,000-33,000 units annually, suffered two setbacks in last one year. First, it was the Supreme Court ban on sales of diesel vehicles (2,000cc and above) in national capital region, imposed in December 2015 and lifted in middle of August this year. NCR is the biggest market for these cars. Sales started normalising from September onwards but a second setback came from demonetisation that has impacted sentiments and left less cash in hands of buyers.

"There is a certain element of insecurity in the market. Customers want more clarity before making purchases. There is a reduction in footfall as customers have other priorities to address. Those who are in the market are taking longer time to take decisions," Roland Folger, managing director and chief executive officer, Mercedes Benz India said last week. Some of the company's models like CLA and GLA are being sold at discount of over Rs 3 lakh.

Luxury made affordable

Industry experts said the sudden announcement of November 8 that withdrew currency notes of Rs 500 and Rs 1,000 has had an impact, leading to piling of inventory at dealerships. Cars that remain unsold at the end of December will have to be sold at even higher discounts/benefits because they have been manufactured in 2016.

Another German luxury car maker BMW is giving discounts on a range of products. There is a discount of Rs 6 lakh on BMW 3 Series 320d Luxury Line and about Rs 8 lakh on BMW 5 Series 520d Luxury Line. Companies are also offering buyer a flexibility to opt for extended warranties and service packages in case one does not want a cash discount. BMW is offering a zero down payment across models and a lower finance rate of 7.90 per cent on select models. The best interest rate offered earlier was 9.35 per cent.

Deepak Jain, chief executive officer at Deutsche Motoren, a BMW dealership in NCR said many customers look forward to such attractive deals in December but added that the benefits this year is especially high. Companies did not comment on these offers and maintained that these are being offered by dealerships.