As automakers continue to go through one of their toughest times in the recent past, most of them are now counting upon deep discounting to revitalize the otherwise falling demand. This has led to discounts of up to 29% on sticker price of various models.
In the past, such high levels of discounts were witnessed usually in December, when automakers work along with their dealer partners to reduce their inventory before entering the next year. Considering the high-discounts which are running across almost all models, it certainly is a great period for you to get your next car.
Country’s leading automaker, Maruti Suzuki is leading the discounting bandwagon. It is offering discounts of around INR 30K-1.2 lakhs per car. It is to be noted that such high level of discounts are relatively unprecedented for Maruti. Surprisingly, the discounts are not limited to the (relatively) slow-moving high-cost products like the S-Cross, but are being offered on even the entry-level models like the Alto which is getting discounts of around 18-20% on its sticker price.
As far as numbers are concerned, the average discount from Maruti per vehicle rose from INR 1,816 to INR 16,941 in the quarter which ended in June’19. The numbers are expected to further go up, considering the current heavy level of discounting. Unsurprisingly, it is expected that it will reflect on the profits of the organization as well.
However, the discounting seems to be working as Maruti’s Head of Sales & Marketing, Mr. Shashank Srivastava stated, “Our enquiry level has increased in the current month and retail sales in August has been better than in July; the discount schemes are likely to support the current momentum.”
It isn’t just Maruti, almost all automakers are offering lucrative offers on their vehicles. Toyota is offering a solid discount of around INR 2.5 lakhs on its Yaris while Honda dealers are offering overall benefits worth INR 4 lakhs on the CRV. Renault and Nissan have lowered the prices of their Captur & Kicks (respectively) by around INR 1.5 lakhs. Other models too are getting hefty discounts, making it a great time to purchase a car!
The overall slowdown in the industry has been due to a complicated mix of factors. The upcoming BS-VI norms are good for the environment however they have brought in uncertainty in customer’s minds, whether they shall get a BS IV motor or wait for a BS VI variant. Many are speculating that a bumper sale might come in around the Feb-March 2020 period, when dealers would be pushing hard to liquidate their BS IV stocks.
Other factor which has led to the ongoing confusion is the policy regarding EVs. Lack of a clear guideline regarding the EVs has also complicated things for customers as they have started delaying their purchase in hope of better EVs & customer-friendly SOPs from government in the near future. Rising costs of insurance, parking, vehicle registration, traffic violation fines and the increasing preference towards ride-hailing services have further fueled the slowdown.