A worker uses a tack welder on the body of a vehicle at the Mitsubishi Motors Corp. manufacturing plant in Santa Rosa, Laguna, the Philippines. (Photographer: Taylor Weidman/Bloomberg)

Auto Sales May Hit A Speed Bump In Seasonally Weak February

Auto sales are likely to remain tepid in the seasonally weak month of February due to muted demand sentiment, according to a BloombergQuint survey of seven dealers across the country.

“Sales growth is most likely to be negative for the overall industry in February except for one or two players as there is clear demand fatigue,” Ashish Kale, partner at United Automobiles, said. “Huge discounts are being offered at the dealer level in order to liquidate the high inventory and reduce the carrying cost.”

The inventory of passenger and commercial vehicles ranged from 35-40 days, and for two-wheelers, it was between 55 and 60 days, as of January-end, according to data from industry body Federation Of Automobile Dealers Associations. Lack of easy availability of finance could also be one of the factors, said a dealer who didn't wish to be named.

Higher fuel prices and upfront insurance costs slowed sales of automobiles, with demand remaining subdued even during the festival quarter last year. Even year-end discounts offered by companies didn't help as inventory piled up.

Discounts Offered By Automakers

Maruti Suzuki

  • Discounts of upto Rs 1 lakh (excluding Ertiga).
  • Baleno, Brezza & Dzire offers of Rs 40,000 (Rs 25,000 exchange + Rs 15,000 cash discount).
  • New WagonR waiting period of two to three months.

Tata Motors

  • Discounts going up to Rs 1 lakh.
  • Nexon – Rs 75,000.
  • Hexa – Rs 1 lakh.
  • Harrier waiting period: three months.

M&M

  • Scorpio – Rs 50,000.
  • XUV500 – Rs 50,000.
  • XUV300 advance bookings cross 4,000.

Two-Wheeler Discounts (Excluding Royal Enfield)

  • Commuter segment (up to 125-150cc) going up to Rs 2,500
  • High-end bikes up to Rs 5,000
  • Bajaj: 555 offer (five-year free insurance, warranty and services)

(BloombergQuint spoke to dealers based out of Kerala, Allahabad, Lucknow, Rajasthan, Mumbai, Delhi and Bangalore for this survey)