Maruti Suzuki India is offering range of discounts and benefits on its cars through the festive season. These are on models sold via the company NEXA and Arena outlets and vary according to variant. The next few days could be the last chance to avail of these benefits as the company has revealed that the festive discounts could end immediately after Diwali.
The discount scheme for October 2019, ranges between Rs 30,000 for cars like Baleno, Alto, Dzire, Swift and goes over Rs 1 lakh for cars like Vitara Brezza and S-Cross. At the start of every month, dealers across India detail discount offers for the new month. As per this new update by the company, Maruti may not offer discounts in November 2019.
It is not that Maruti is offering high discounts only for October 2019. The company has been offering huge discounts for many months now. Starting from Diwali 2018, Maruti has been experiencing low sales. In the first half of last 12 months, the company posted stagnat sales. In the second half, sales declined by an average of 27% ever month.
This resulted in Maruti cars getting stocked up at company plants and dealers across India. On average, Maruti dealers stock about 30 days worth of inventory. But due to slowdown, and access production, inventories went up to 60 days in some cases.
To counter this problem, Maruti reduced production days at company plants. With production now streamlined to meet the low demand, the company has seen reduction in inventory. Thanks to this, Maruti now aims to focus on getting their profits back on track, and cut discount offers.
During the April to July quarter, profits dipped by 27.32 percent to Rs.1,435.5 crores while operating margins also declined substantially. Discounts in that period stood at Rs.16,941 on average while these discounts in the July to September period went up to over Rs.20,000 on average. The discounts were offered in view to clear out existing BS IV stocks ahead of the new BS VI emission norms coming into effect from 1st April 2020 and also to balance out sales.
Maruti has said that by end of December 2019, they will stop production of BS4 cars. This way their dealers will have enough time to clear BS4 stock, ahead of the 1st April 2020 deadline. This is another reason as to why the company may stop offering discounts from next month onwards.
Maruti Suzuki claims to be the first OEM to bring in BS VI compliant cars into the mass segment, and that too ahead of time. The company already has over 70 percent of its petrol car portfolio updated to BS6 emission standard. Their BS VI petrol vehicle lineup consists of the Alto 800, WagonR, Swift, Baleno, Dzire, Ertiga, and XL6.
The BS VI compliant vehicles have also been tested extensively and can also run on BS IV. BS VI petrol variant will result in nearly 25 percent reduction in Nitrogen Oxide emissions. Maruti will not launch diesel BS6 cars in the immediate future.