Demonetisation has driven up discounts for cars, which are running anywhere between 10% and 15%, making December a good time to buy a car. Dealers looking to clear their inventory before the year is out are willing to fork out more discounts than they do during Diwali when they offered around 7-9%. Nevertheless, even there is a pick-up in volumes, the sale of passenger cars in 2016 may fall short of the targetted three million units.
Maruti Suzuki and Hyundai have both increased discounts across most models including popular ones like the Elite i20 hoping these will tempt buyers. Discounts for the petrol variant of Celerio are up at R19,000 – R20,000 in the top metros; during Navratri and Diwali these were smaller at around R12,000. The discount on the Swift is now R15,000, up over R6,000 – R9,000 a couple of months back. Even Maruti’s popular compact sedan, Dzire, now attracts a discount of R10,000- R11,000, twice the earlier levels of R5,000 – R6,000.
“Discounts are higher than during the festive season and we are also throwing in a zero down payment scheme, 100% on road funding from banks and best exchange offer to the customers. December always sees discounts but this time due to demonetisation we have dropped prices more than in the festive season,” said a Maruti dealer in eastern suburbs of Mumbai.
Hyundai’s popular compact car – Grand i10 –is now being sold with a discount of as much as R50,000 which is almost R10,000- R15000 more than what is was during the festive months. In fact, some of the dealers have started to offer R10,000 to R15,000 on the Elite i20 which is one of the most popular passenger cars in the country.
Company executives concede they are looking to push out the inventory before the month is over and therefore they are providing customers with finance options. Hyundai sold a record 50,000 vehicles during October and Maruti also reported record retail sales in the same month. However, demonetisation has resulted in fall in footfalls at dealerships by about 30-40%.
In 2016, Hyundai manufactured a record five lakh units for the domestic market. Of this, 4,60,000 has already been pushed into the market and the company is trying to sell the rest. “We are trying hard to push the remaining 40,000 units in the market with the help of exclusive offers in December. Post demonetisation customers stopped visiting showrooms but we’re hoping for a pick up in sales,” a senior executive of Hyundai said.
According to a senior executives in SIAM, some dealers have seen a 70% to 80% decrease in footfalls especially in the rural areas. Other manufacturers likeMahindra and Mahindra (M&M), Renault, Honda have resorted to the same strategy for pushing the inventory in the market. “This year the industry was hoping to achieve 3 million vehicle sales but now we may marginally fall short due to the impact of demonetisation,” said another executive of a car manufacturing company.