Squeezed by the decline in demand and rising costs, carmakers are hoping that new launches, rather than big discounts, will ramp up sales this festival season.
Since last month, Maruti Suzuki India (MSIL), the country’s largest car-maker by sales, has been offering discounts of up to Rs 25,000 on its cars.
These are not cash discounts but savings in terms of an extended warranty, free or discounted insurance and some accessories.
Maruti, like the others, is hoping that the good monsoon will boost demand in rural markets. The company also plans to deepen its penetration in rural markets.
“We have got good responses starting from Onam last month and during Navaratri, and expect to sell 10-15 per cent more cars this year than during last year’s festive season,” says Mayank Pareek, Chief Operating Officer - Marketing and Sales, MSIL, speaking to Business Line .
Hyundai Motor India (HMIL), the second-largest car manufacturer, says that it might be a challenge meeting last year’s numbers, but is hoping to do better after the monsoon, which has helped revive some consumer sentiment.
The company had sold 35,778 units in October last year. On the offers side, it has some cash benefits on its small cars, such as the Eon, Santro and i10, with savings of around Rs 31,250.
“As part of our 15 years and five million cars celebrations (Hyundai completes 15 years in India this year), we are offering upgrade discounts not only to Hyundai’s customers but also to new customers,” says Rakesh Srivastava, Vice- President, Marketing and Sales.
Analysts believe this season will result in some growth for the auto industry after months of negative or flat growth.
But, the discounts are “not real” compared to last year because of the recent price hikes by manufacturers, says C.S. Jog, Director, Resurgent India.
If there is a discount of one per cent on a car after a price hike of two per cent, it cannot be considered as a discount, he explains.
Small cars may do well
According to Vishnu Mathur, Director-General, Society of Indian Automobile Manufacturers, the festival season may bring in good numbers for lower-budget small cars and two-wheelers, but not in all segments.
With little financial elbow room for discounts, most companies are banking on consumer interest being sparked by new launches. For example, Nissan expects to boost sales with the new sports utility vehicle, Terrano, which has had over 6,000 bookings since its launch in August.
“We are focusing on providing better value for our customers rather than free offers. We are offering 100 per cent finance on all our cars. We are also offering an exchange bonus of up to Rs 50,000 on certain variants,” says Nitish Tipnis, Director, Sales and Marketing, Hover Automotive India, the national sales company for Nissan.
Toyota Kirloskar Motor (TKM) has little in its armoury apart from some ‘limited editions’ and the recently launched Innova facelift.
“We cannot afford to give discounts during this time because of various economic reasons, which had also made us cut production by almost half over the last six months. We have to clear inventories first,” says Vikram Kirloskar, Vice-Chairman.
Online promotion
Tata Motors, whose sales have been dipping each month, has launched a scheme called ‘ Nacho Gao Tyohaar Manao ’ for its passenger cars, such as Indica Vista, Indigo, Indigo Manza, Nano and Safari Storme.
“Customers purchasing any of these vehicles during the offer period (October 1–31) will be eligible to participate in an online offer. They will be asked to answer two multiple choice questions and coin an original slogan,” a company spokesperson said.
For every correct entry and approved slogan there will be an assured gift of one gm of gold.
Participants can also win either five or 10 gm of gold and a bumper gift of one kg gold, says the company.
In addition, it is also offering cash benefits of up to Rs 1.23 lakh on the Safari Storme, Rs 89,000 on the Vista, Rs 54,000 on the Indigo eCS and Rs 60,500 on the Sumo Gold. “We are also offering low-cost insurance at Re 1 for three years,” the spokesperson added.
In the luxury cars segment, too, it is the same story. Audi is banking on new cars, such as the Audi RS 5, S6 and TT.
“The collection also includes a host of special features, new engines, and new colours across the Audi range in India,” says Joe King, Head, Audi India.
Record sales
In the two-wheeler segment, Hero MotoCorp, the country’s largest two-wheeler manufacturer, says it has stopped giving discounts and free accessories for the last six years but is nevertheless confident of breaking its own sales record for the season.
“We sold 1.1 million bikes last year, between October and December, and it was a record. With new campaigns and new launches, we will do better than that this year,” says Anil Dua, Senior Vice-President — Marketing and Sales.
Bajaj Auto says that it is expecting similar numbers to last year’s third quarter (October-December).