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In an effort to tide over the defused market sentiment Tata Motors has launched the 'Club Class Buyback Assurance' programme which offers buyers of the Manza 60 per cent of the current purchase price after three years.
The offer is in addition to the steep price cut of upto Rs 50,000 announced yesterday by the Mumbai-based India's largest vehicle making company by revenues on its sedan and hatchback range aimed at enticing buyers.
Tata Motors though is not alone to offer price cuts. General Motors too has made a tall price cut of Rs 30,000 on its four months old hatchback Chevrolet Sail U-VA. Response for the premium compact car Sail U-VA has been lukewarm since its launch in November.
The Sail U-VA now starts at Rs 4.19 lakh (ex-showroom, Thane) as against its earlier price of Rs 4.49 lakh (ex-showroom, Thane). Response for the hatchback dipped when GM launched the Sail sedan based on the same platform last month at Rs 4.99 lakh.
The slowdown in demand has not spared even the diesel models which were best-sellers only a few months ago. Besides the regular cash discounts on the SX4 Maruti Suzuki is offering 100 litres of free diesel with its Swift and DZire models and other consumer benefit offers.
Japanese car makers Toyota and Honda are giving away corporate discounts, cheap insurance packages and cash discounts throughout the week. Both companies, which have recently increased their prices, though, have not made an official announcement about any price cut.
Struggling German car maker Volkswagen is doling out benefits of up to Rs 50,000 on the Polo (hatchback) and Vento (sedan). The Volkswagen Vento carries a cash discount of Rs 30,000 in addition to free insurance.
Other car makers such as Nissan, Renault, Hyundai and Mahindra & Mahindra too are struggling to find new car buyers forcing their dealers to offer discounts ranging from 5-10 per cent based on the cost of the car.
During the April-January period the passenger car segment reported a fall of 1.8 per cent to 1.55 million units as against 1.58 million units sold in the same period last year. Looking at the subdued situation SIAM has predicted a flat to negative growth for the next year.
"Several car producing facilities are operating at half the rate of their installed capacities presently. Consumer interest in new cars have taken a massive hit and dealers are carrying huge inventories. Companies or dealers will have to go discount offers to clear stocks", said a Mumbai-based analyst.
With difference of price between diesel and petrol increasingly coming down companies are reworking their pricing strategy with regards to the diesel models. All companies who procure their diesel engines locally are trying to make the variant cheaper and make it competitive compared to petrol variants.
Discounts and other offers are mainly limited to cars as sports and multi utility vehicles have beaten the slowdown and continue to mark a robust growth in sales. The segment reported a rise of 57 per cent in the April-January period this year at 451,935 units as compared to 288,093 units sold in the same period last year.
