)
Mumbai-based Suresh Jain, 34, was among thousands of fence-sitters repeatedly delaying their plans to purchase new cars for a bagful of reasons. The main deterrent, though, were stubbornly high interest rates. Now, with a direct discount of Rs 50,000, no insurance and registration costs and an assortment of genuine accessories — together totalling around Rs 40,000 — thrown in, this media professional went ahead and bought a premium hatchback without wasting any time.
At a time when car dealers are eager to liquidate their festive stocks before the new year sets in, discounts and other consumer benefits on car models are rising sharply. Car manufacturers, battling an inventory pile-up, are further egging on consumers by saying “industry discounts are at an all-time high”.
Some of the less-popular car models, such as those in the General Motors range, are seeing the biggest discounts. For instance, the company is offering benefits of up to Rs 95,000 on the Chevrolet Beat hatchback and Rs 85,500 on the multi-seater Enjoy.
Similar is the case with Ford Motor India, which is offering benefits of Rs 78,000 on the Figo and Rs 76,000 on the Classic. Following a six per cent decline in sales this year, the company is also offering LED TVs, washing machines, microwave ovens, smartphones and more — worth up to Rs 5 crore — under a five-day promotion scheme.
Even the market leader, Maruti Suzuki, isn’t behind in this discount blitzkrieg. It is offering consumer benefits of Rs 75,000 on the Maruti Ritz and over Rs 40,000 on the popular Swift. The newly launched models, such as the new Alto K10 and Celerio, come packed with benefits of Rs 15,000.
Tata Motors is offering some of its older-generation Nanos at an alluring benefit of Rs 80,000. Mahindra and Mahindra has come out with a three-week sale, where benefits of Rs 83,000 is offered on the Xylo and Rs 75,000 on the Quanto.
“Discounts had fizzled out a little during October and November, but those are back to their usual highs in December. Consumers are commonly found negotiating hard on accessories like music systems,” said a Maruti Suzuki dealer in Mumbai.
While company officials say the discounts are definitely high for December, dealers claim current discount levels are higher than the same month last year. “Manufacturers are offering discounts but we have to anyway shell out additional benefits of our own. This is why discounts are 10-15 per cent higher than December 2013,” said a General Motors dealer.
Companies want to liquidate the 2014 stocks before 2015, to avoid issues like depreciation. Besides, consumer sentiment has not picked up; buyers are yet to rush to dealerships despite several rounds of cuts in petrol and diesel prices.
“Even after an excise duty reduction earlier this year and cooling of fuel prices, the customer sentiment has not picked up, apart from a slight demand surge for new entries during the festival season,” said P Balendran, vice-president, General Motors India.
The excise duty cut made six months ago had had little impact. In the April-October period, passenger vehicle sales grew only 2.3 per cent over last year to 1.47 million units.
The automobile industry, however, is asking the government to retain the duty cut to spur demand recovery. Renault India Chief Executive & Managing Director Sumit Sawhney said: “The government should maintain the reduction in excise duty going forward. The automobile industry has been going through a rough patch lately; this move will provide the necessary impetus.”
ALSO READ: Car sales to miss FY15 growth target
