Automakers offer huge discounts to maintain festive season tempo

After witnessing a 61% surge in passenger car sales in November, despite the festival season having ended, auto manufacturers are trying hard to maintain the tempo in the…

After witnessing a 61% surge in passenger car sales in November, despite the festival season having ended, auto manufacturers are trying hard to maintain the tempo in the traditionally slack month of December. They are offering heavy discounts on vehicle sales, starting from as little as Rs 15,000 on hatchbacks and going up to as much as Rs 70,000 on sedans. The icing on the cake for the customer sometimes comes in the form of an additional 5-10% discount, although on models that are not doing so well.

A few cars on which you can get heavy discounts include Mahindra-Renault Logan, GM Chevrolet U-VA and Aveo, Mitsubishi Cedia and Lancer. The Logan 1.4 petrol GL costs Rs 4.66 lakh ex-showroom Mumbai, and the company is offering a flat Rs 60,000 discount on it. The Logan has not been doing quite well in the market, with sales slipping month after month. For November, sales stood at 279 units, down from 401 units in October. Chevy U-VA did 524 units in November, lower than in the earlier months. The company is looking at re-packaging it, and is therefore emptying out its inventory.

Even Maruti Suzuki products, including Alto and Estilo attract discounts starting from Rs 15,000. Also, one can look forward to a discount of Rs 35,000 on Hyundai i10, including free insurance and extended warranty.

Abdul Majeed, an automotive practice leader with PricewaterhouseCoopers (PwC), said the motive is to liquidate the standing inventories of 2009. ?It?s more on the models that are not selling well in the market. After the festive season, the auto industry goes through the dull December. It?s a regular cycle.?

Car makers want to make the best use of the low existing low interest on car loans, before they go up again next year as the government takes new measures to control inflation. Mayank Pareek, executive officer (marketing), Maruti Suzuki India, said, ?This is the best time to buy a car. The interest rates are benign and discounts are freely available. We are offering discounts across models, including the Alto and Estilo, to mention a few.? Currently, banks are offering interest rates of 10-10.5% on auto loans, but may increase them from January onwards.

December is traditionally a slack month because buyers are reluctant to go home with a chassis number of 2009 which will become old in the very next month and therefore, command a much lower resale value. Also, the period between December 14 and January 14 is a low-spend period for many Hindus.

Sumit Bali, CEO, Kotak Prime, said, ?Manufacturers are coming up with very attractive offers to clear up stocks. We are expecting this December to be a hot season as against the last few years.? Said an official from the State Bank of India, ?The auto industry is doing well and various banks are tying up with with numerous dealers and manufacturers to offer customers a better deal. From January onwards, we will see sales pick up more in the auto division as people would like to wait for the New Year and then go ahead and buy.?

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First published on: 26-12-2009 at 23:28 IST