This Is The Best Time To Buy Cars, Say Dealers

December 05, 2014

Mumbai-based Suresh Jain (34) was amongst thousands of fence-sitters repeatedly delaying the purchase of a new car for a bagful of reasons. Stubbornly high interest rates was proving to be the main deterrent.

However, a direct discount of Rs 50,000, no insurance and registration costs and an assortment of genuine accessories thrown in (all together totalling to around Rs 40,000) saw the media professional buy a premium hatchback without wasting any time.

With car dealers eager to liquidate festive stock before the new year sets in, discounts and other consumer benefits on car models are rising sharply. 

Car manufacturers, who are battling inventory pile up, are egging consumers further by stating that 'industry discounts are at an all-time high'.

Models, which are less popular such as the range from General Motors, are witnessing maximum discounts. For instance, the company is offering benefits of up to Rs 95,000 on the hatchback Chevrolet Beat and Rs 85,500 on the multi-seater Enjoy.

Same is the case with Motor India, which is giving benefits of Rs 78,000 on the Figo and Rs 76,000 on the Classic. Moreover, after a witnessing a decline in sales this year, the company is giving LED TVs, washing machines, microwaves, smartphones and more, worth up to Rs 5 crore in a five-day long promotion scheme. 

Market leader Suzuki isn't behind either. It is offering consumer benefits of Rs 75,000 on the Maruti Ritz and over Rs 40,000 on the popular Swift. Even newly launched models like Alto K10 and Celerio are being offered with benefits of Rs 15,000.

"Discounts did fizzle out a bit during October and November but December is back to its usual highs. Consumers are commonly found negotiating hard on accessories like music system etc," said a Maruti Suzuki dealer in Mumbai.

Companies want to get rid of the 2014 stock before 2015 to avoid issues like depreciation. 

Moreover, consumer sentiment has not picked up.  Despite several rounds of cut in petrol and diesel prices, consumers have not rushed to buy cars.

“Even after reduction of the excise duty earlier this year and cooling fuel prices, the customer sentiment has not picked up apart from a slight demand surge during the festival season for new entries,” said P Balendran, Vice President, India.

The excise duty cut made six months ago has had little impact. Passenger vehicles sales grew just 2.3% in the April-October period this year to 1.47 million units as against 1.44 million units sold in the same period last year. 

The industry, however, is asking the government to retain the duty cut to spur demand recovery. 

Sumit Sawhney, CEO and Managing Director, Renault India said, "The government should maintain the reduction in excise duty going forward as well. Indian auto industry has been going through a rough patch lately and this move will provide the necessary impetus to the industry."
(Business Standard)