Despite sustained demand for new cars across mass-market segments, a majority of dealerships are sitting on unsold MY2025 inventory, forcing sharp discounts as the industry moves further into calendar year 2026 and prepares for fresh launches.
From Hatchbacks to Luxury SUVs
Hatchbacks like the Alto K10, the S-Presso that saw a sales spike late last year, are available with benefits of upto Rs 50,000 including on some CNG variants. Premium hatchbacks like the Glanza, Grand i10 Nios, i10 and the Swift are seeing discounts of up to Rs 1 lakh depending on variant and location.
Sub-compact SUVs like the Exter are being offered with benefits of up to Rs 1 lakh, while the pre-facelift Punch gets discounts of around Rs 50,000. Compact SUVs like the Mahindra XUV 3XO, the Brezza and the Nexon are also being offered with similar benefits.
The mid-size SUV segment—one of the fastest-growing parts of the market—has emerged as a major clearance zone, there are hidden gems in the segment that include variants of the Kushaq, Taigun the Grand Vitara, Hyryder, the Tata Curvv and a few others that are available with dealer level benefits of up to Rs 3 lakh on select petrol, hybrid and turbo-petrol variants.
Upper mid-size SUVs, with some available with with three row seating are also being discounted heavily, with dealer-level benefits going as high as Rs 2 lakh on some models like the Hector Plus, Safari, the Alcazar and the XUV700.
Sedans have not been spared. Mid-size sedans like the City, Verna and Virtus are seeing discounts of up to Rs 2 lakh, while entry-level sedans like the Amaze, Dzire and the Tigor are available with benefits of up to Rs 75,000. Even the electric vehicle segment is witnessing attractive discounting with MY2025 EVs across brands are being offered with Rs 50,000–Rs 1 lakh in combined benefits, dealers said.
Inventory Pressure and Expert Outlook
Dealer-level data and industry executives said the inventory overhang spans multiple fuel types petrol, diesel, petrol-hybrid and CNG across nearly all price points, covering hatchbacks, compact SUVs, mid-size SUVs and even EVs. The pressure to liquidate older stock intensifies as the month comes to an end with manufacturers and dealer’s jointly pushing retail schemes to clear MY 2025 inventory. While several automakers officially announce monthly discount offers, dealers said actual on-ground benefits are often higher. These include additional cash discounts, free accessories, lower insurance quotes and exchange bonuses.
According to Ravi Bhatia of Jato Dynamics, Weighted incentives in 2025 grew only 0.5% Despite growing Average selling price. up 1.2% While tactical intervention to nudge slow moving variant may be there . We expect incentives to moderate as 2026 progresses. Industry executives expect the discounting cycle to continue for atleast a couple of months. For buyers, the current phase presents one of the most attractive pricing windows in recent years, even as headline demand for mass-market vehicles remains intact.
“Fast-moving trims are selling well, but some MY2025 variants that customers don’t perceive as value-for-money are difficult to find homes,” said a dealer principal. “The only way to move them is through aggressive discounting.” Higher wholesales in late 2025, driven by a strong festive season and temporary GST-related incentives, left several dealerships with fewer unsold units. While some brands claim dealer inventory levels are now under control, ground-level conditions suggest a more uneven picture. “From a dealer perspective, cash flow is critical,” said another dealer. “Even if demand is strong overall, you cannot afford to hold older model-year vehicles once fresh stock and updated models start arriving.”
