Wednesday, October 4, 2023

Festive discounts on cars to drop 10-20% in 2020


Every year, the festive season brings the rain of discounts on various in the Indian economy. These include automobiles, consumers goods etc. However, the year 2020 seems to see a significant slump in the festive discounts on automobiles. According to a TOI report, car dealers say that, in 2020, festive discounts on automobiles will be 10%-20% lower in comparison with the last festive season.

The range of discount level reduction will depend on the vehicle models and market. Car companies are currently offering discounts ranging between Rs 25,000-Rs 75,000 in cash and other benefits on the mass market models and SUVs. As the trend also shows, the benefit packages are higher on small cars and sedans. On the other hand, bestselling or new SUVs are not getting any cash benefits at all.

This could be linked with the trend that the small passenger cars are getting more traction in the last few months, since the reopening of the India economy after the lockdown induced by the Coronavirus pandemic. People are focusing more on getting personal mobility mediums and small cars are seeing a higher number of sales in comparison with other segments.

Festive discounts on automobiles by Maruti Suzuki and Hyundai in 2020

India’s largest car manufacturer Maruti Suzuki is offering the entry-level hatchback Alto with discounts of around Rs 40,000 in October 2020, which is slightly higher than Rs 35,000-Rs 38,000 discounts offered by the auto company in September 2020, but less than Rs 55,000-Rs 58,000 discounts offered in October 2019.

The Maruti Suzuki Dzire petrol is being offered with a discount of Rs 42,000 in October 2020, in comparison with Rs 40,000 in September 2020. On the other hand, the Dzire petrol was sold with a discount of Rs 70,000 in October 2019.

Clearly, the difference is pretty significant.

Festive discounts on different car models:

ModelDiscount in October 2020Discount in September 2019Discount in October 2019
Maruti Suzuki AltoRs 40,000Rs 35,000-Rs 38,000Rs 55,000-Rs 58,000
Maruti Suzuki Dzire (Petrol)Rs 42,000Rs 40,000Rs 70,000
Hyundai SantroRs 20,000-Rs 60,000NANA
Hyundai Grand/Nios i10Rs 70,000-Rs 75,000NANA

India’s second-largest car seller Hyundai too is offering festive discounts ranging between Rs 20,000-Rs 60,000 on its small cars like Santro, Grand i10, Nios i10. The Hyundai Elite i20 and Elantra are being offered discounts of Rs 70,000-Rs 75,000. On the other hand, the very popular Hyundai Creta is not getting any discounts and same for the Venue as well.

Another popular SUV in the Indian market Kia Seltos too is not getting any festive discount boost.

Why festive discounts on automobiles are lower in 2020

According to the car dealers, the reason for lower festive discounts on automobiles is because lower stocks build-ups this year, as the market sentiment is yet to revive to the pre-Covid level.

Despite the dampened market sentiments due to the surging cases of Coronavirus infection, there are more reasons behind the lower festive discounts on automobiles this year.

In 2019, the Indian auto industry was transitioning to BS-VI emission norms from BS-IV emission norms. Therefore, the automakers, dealers were in hurry to clear the inventory of the BS-IV vehicles. Hence, the festive discounts on automobiles were higher in order to lure the buyers, as the festive season sees the maximum sales of vehicles every year, considering the consumer sentiment to bring a new car or two-wheeler during the auspicious period.

In 2020, as the Indian auto industry has completed the transition to BS-VI emission demand and pent up demand is clubbed with supply constraints, the discounts are low. Also. the massive investments made by the automakers for the transition to stringent BS-VI emission norms is another reason behind the lower festive discounts on automobiles.

Also Read: Auto sales zoom into fast lane in September, CV sales in red: All you need to know

Team AFT
Team AFT
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