Tuesday, November 19, 2019

Posted at: Jul 11, 2019, 7:41 AM; last updated: Jul 11, 2019, 7:41 AM (IST)

Car sales in reverse gear

Discounts fail to revive consumer sentiments
Car sales in reverse gear
Illustration: Sandeep Joshi

Shivani Bhakoo/

Vijay C Roy

Tribune News Service

Ludhiana/Chd, July 10

The steep hike in discounts offered by carmakers and dealers has failed to revive consumer sentiments in the region as sales continued to remain in negative territory for the third consecutive month. In line with national downward trend, the dealers in the region witnessed up to 20% decline in sales. 

According to industry, low consumer sentiments, liquidity crunch and apprehensions surrounding introduction of BS-VI norms in few months proved stumbling blocks. According to dealers, the current fiscal could be a challenging year for the automobile sector due to transition to BS-VI norms from April 1, 2020.

“Starting January this year, the business has slowed down as the election fever gripped everyone. And then the customers preferred to wait for the Budget. Also, the government plans to leapfrog directly from BS IV to BS VI norms by 2020. So the customers are waiting for the new technology,” said Rishi Dada of Dada Motors, Ludhiana.

Nationally, domestic car sales were down 24.97% to 1,39,628 units as against 1,83,885 units in June 2018. Overall, in the April-June period, passenger vehicles sales declined 18.42% to 7,12,620 units as compared to 8,73,490 units in the year-ago period, according to data released by the Society of Indian Automobile Manufacturers on Wednesday.

The northern region comprising Punjab, Chandigarh, Haryana, Himachal Pradesh, Jammu & Kashmir, including Delhi, Uttar Pradesh, Rajasthan, contributes 25-30% of the total sales.

With subdued sales confronting the industry, the automakers and dealers have seen offering discounts ranging between 25 and 30% more in the last quarter as compared to the corresponding period last year to clear the inventory. Dealers are offering cash discounts, exchange offers and corporate benefits to attract potential customers and to convert enquiries into sales. However, dealers said it is still difficult to bring potential customers to dealerships.

“This is beyond doubt that sales are subdued and figures vary for different carmakers. On an average, the dealerships are offering 25-30% more discounts this year as compared to last year,” said Sanjay Dahuja, managing director, Berkeley Hyundai, Chandigarh.

The discounts are offered across all categories right from entry-level cars to luxury sedans except few new launches.

Market leader Maruti Suzuki is offering benefits up to Rs 45,000 on Alto and Rs 50,000 on Brezza. The offer varies from model to model and includes exchange bonus and corporate benefits.

Hyundai is offering benefits ranging from Rs 50,000 to Rs 95,000 on models like Santro, Grand i10, i20 and Verna. Similarly, home-grown Tata Motors is offering cash discounts starting from Rs 15,000 on Nexon to Rs 75,000 on Bolt. Honda is offering benefits starting from Rs 25,000 on Civic to Rs 2.50 lakh on CRV. 

Offers to drive sales 

  • Dealers are offering 25-30% more discount as compared to last year
  • Offers include cash discounts, corporate benefits, exchange bonus


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