Automakers Offer Discounts To Gold Coins In Festive Season Push

Automakers are luring buyers with cash discounts, freebies and even gold coins this festival season as they look to boost retail sales after the disruption triggered by the Goods and Services Tax.

Maruti Suzuki India Ltd., the country’s largest passenger vehicle maker, is offering discounts of up to Rs 50,000 on its models, dealers told BloombergQuint requesting anonymity as the company doesn’t allow them to talk to the media.

Year-end discounts are usually higher as automakers try to exhaust inventory. Yet, Maruti Suzuki’s discount is Rs 5,000-8,000 more than in December last year, they said. That pushed up the festival sales for the company by more than 20 percent, the dealers said.

Automakers typically offer bargains and bundle schemes during the August-October festival period. This year, sales fell ahead of the GST rollout in July as dealers pared inventory fearing losses. They restocked in July and August, anticipating demand earlier than usual as the nine-day auspicious Navratri period fell in September this year.

Inventory levels were higher than last year at 45-60 days, according to the Federation of Automotive Dealers Association. Automobile manufacturers were “piling up inventory” with dealers, said association President John K Paul. That meant most companies reported robust wholesale numbers in September.

Also Read: Festive Cheer For Automakers As Sales Rise In September

To boost retail volumes, Hyundai Motor India Ltd. and Tata Motors Ltd. are offering free insurance for the first year and even gold coins. That’s over and above cash discounts of up to Rs 50,000 on their models.

Sales have been 15-20 percent higher than the festive season last year and customer walk-ins and enquiries have gone up, a Tata Motors dealer said. There are cash discounts on older models but offers on the new ones like the Tigor compact sedan and the Tiago hatchback are limited, the dealer said.

Demand for Honda Cars India Ltd. also improved. “Discounts on models such as the WR-V and the City are lower than last year, but sales are 18-20 percent higher,” said Saurabh Kedia, a Kolkata-based dealer of Honda Cars. “On (older) models such as the BR-V and the Amaze, we have attractive discounts.”

India’s largest utility vehicle maker Mahindra & Mahindra Ltd. is also offering discounts from Rs 22,000 on its entry level models to Rs 2.43 lakh on luxury SUV Rexton. Yet, sales rose lower than expected at 10 percent, said one of its two dealers. They hoped that the demand improves in October.

Dealers of Nissan India were not enthused despite discounts of up to Rs 50,000 on models besides an additional warranty and insurance. The demand this festive season is definitely lesser than last year, one dealer said.

For two-wheeler makers, the season has been a mixed bag so far.

Demand for Honda Motorcycle and Scooter India Ltd.’s two-wheelers remained high. It offers cash discounts on some motorcycle models but not much on scooters. Still, retail sales rose in double digits in September, one of its dealers told BloombergQuint.

Discounts didn’t help Bajaj Auto Ltd., dealers said. Retail volumes are lower during the festive season so far compared to last year when there were not discounts, said a company dealer. He hopes for better sales ahead of Dhanteras.