Big discounts driving UV sales: Being sold at a discount of up to Rs 1 lakh

Sales of compact UVs rose around 6% y-o-y in September. While average cash discount on hatchbacks and sedans is around Rs 40,000, many utility vehicles (UVs) are being sold at a discount of up to Rs 1 lakh. bookings for models like Vitara Brezza, Creta, Venue, Ertiga and XUV3 00 are at least 20% higher.

By: | Updated: October 14, 2019 7:16 AM

Utility vehicles are at the forefront of consumers' choice this festival season, enticed by higher discounts and promotional offers compared to hatchbacks and sedans, a trend that is paying off for car makers even during subdued demand. While average cash discount on hatchbacks and sedans is around Rs 40,000, many utility vehicles (UVs) are being sold at a discount of up to Rs 1 lakh. Several dealers FE spoke with said bookings for models like Vitara Brezza, Creta, Venue, Ertiga and XUV300 are at least 20% higher since the second half of September compared to the pre-vious few months. Experts believe since prices of diesel variants of UVs are expected to go up by around Rs 1 lakh from April 2020, when BS-VI kicks in, consumers are getting a better deal now as discounts on those variants are also at an all-time high. To be sure, even as the over-all passenger vehicle volumes fell by around 24% year-on-year (y-o-y) in September, sales of compact Ws rose around 6% y-o-y. Maruti Suzuki's passenger car sales, comprising models like Swift, Baleno and Ciaz, declined by 31.5% y-o-y in SeptembetIn comparison, volumes of utility vehicles such as Vitara Brezza, S-Cross and XL6 fell by a marginal 0.5% y-o-y. Even in the April-September period, while the overall passenger car sales dipped by over 33% y-o-y, UV volumes fell by around 3.78%y-o-y, indicating that the demand for UVs is still much better than other segments.

Though on a year-on-year basis the wholesale numbers show a decline due to the ongoing slowdown in domestic sales, demand during September for UVs were slightly better compared to August andJuly. Shashank Srivastava, executive director (marketing & sales) at Maruti Suzuki India, said, as a percentage of total industry sales, the UVs have been growing at much higher pace than the other segments in the last few years. “There seems to be a design preference towards UVs by the consumers. It is a phenomenon across the world, in markets like China and South America, which is getting reflected in the Indian market too,” Srivastava told FE.

Dealers of Hyundai Motor India said they have received more bookings for Venue followed by Creta in September, compared to models like Santro and i10.“For the first time ever, there is a discount on Creta which has attracted many customers. Most of the bookings started after September 15,” one of the dealers said. A Tata Motors dealer said bookings of Nexon are at last 15% more than August. New entrant MG Motor re- opened the bookings of its SUV Hector on September 29 to make the most of the festive season.

Puneet Anand, group head and senior GM, marketing, at Hyundai Motor India, said most customers are bargain hunters at this time and since offers on UVs are not always available, it is the best time to buy. “While UVs have more longevity, better ground clearance and more power, with some additional offers now, it is like icing on the cake,” Anand said.

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