auto industry: Car discounts make comeback after four long years of waiting in the auto industry


Car discounts have made a return after four years of long waitlists, driven by changes in the automotive industry’s pricing strategies. Dealers are ramping up production to meet high demand, particularly for SUVs, and are offering substantial discounts across various models. Discounts are available on a range of vehicles, including hatchbacks, sedans, and electric vehicles (EVs), with some reaching as high as Rs 1.5 lakh on specific models, reported TOI.The shift towards consumer-friendly pricing comes as the automotive market adapts to changing dynamics and consumer preferences, especially with the upcoming festival period in mind. According to the Federation of Automobile Dealers Associations (FADA), current discounts range from Rs 15,000 to Rs 20,000 on hatchbacks like the older model of the Swift, while sedans like the Honda City are seeing discounts of Rs 50,000 or more, which include cash discounts, corporate loyalty, and exchange programs.

FADA data shows that higher discounts are prevalent on both hatchbacks and sedans. For instance, the Maruti Suzuki Alto K10 can fetch up to Rs 42,000 in discounts for its manual petrol variant. The Maruti Suzuki WagonR is seeing benefits ranging between Rs 25,000 and Rs 30,000, whereas the Hyundai Grand i10 Nios has discounts between Rs 18,000 and Rs 35,000.

Sedans are also witnessing significant discounts. The Hyundai Aura offers benefits ranging from Rs 23,000 to Rs 40,000, with the highest on its CNG model. The Honda Amaze is also getting over Rs 40,000 in discounts, including exchange offers and corporate discounts.

According to the TOI report, high-priced SUVs and electric vehicles are no exception to the discount trend. The Hyundai Alcazar is receiving Rs 45,000 to Rs 65,000 off, while the Mahindra XUV400 EV grants up to Rs 1.5 lakh in benefits. The Honda City eHEV comes with discounts amounting to Rs 65,000.

Dealers attribute the discounts to the growing inventory levels. “June and July are laggard months, so naturally discounts are high… but also because inventory levels are at 55-60 days and on the increase for the past three months. Some makes and models are still on the waitlist like the Mahindra Thar. Others like Maruti Suzuki’s new Swift and Ertiga don’t have any discounts at all. But generally, discounts on hatchbacks and sedans are steep,” TOI quoted FADA President Manish Raj Singhania as saying.Experts in the auto industry noted that discounts as a percentage of the retail price are highest for smaller cars. According to JATO Dynamics, models like Alto, Bolero Neo, S-Presso, Celerio, and Ignis exhibit the highest discount-to-price ratios.Ravi Bhatia, president of JATO Dynamics, remarked, “The data for the top 10 models with the highest percentage discounts for June 2024 shows that discounts have increased in response to inventory build-up in anticipation of the festival period. Car prices had significantly increased in the past, which has adversely impacted demand growth even though SUV sales are holding up.”

Dealers report that production ramp-up by some of the top-selling car companies has resulted in more wholesale billing than retail in recent months. This accumulation of inventory has been a key driver behind the current surge in discounts.

(With inputs from TOI)

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