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Huge discounts on Cars after slump down in June

After a horrific slowdown in the car sales growth in June this year, almost all the car manufacturers are offering large discounts and freebies to their customers in order to get back the customers to the market and to regain the momentum lost after the slump. Sales growth rate slumped to terrifying 1.6 per cent in June, slowest in 26 months.

Honda started the discount wave by offering a mind boggling discount of 1.7 lakhs on Honda Jazz. Honda Jazz is currently struggling to make a mark in the Indian auto market. The discount on Honda Jazz is a limited period affair only. Maruti Suzuki is also offering discounts worth Rs. 50,000 on their best selling models like Maruti Suzuki Alto, Maruti Suzuki Estilo, Maruti Suzuki WagonR.

Shashank Shrivastava, Chief General Manager (Marketing) of Maruti Suzuki said that the company is just responding to the current demand arising from the market. He said that the retail sales of the cars have taken a slump due to less customer response. He added that the company is offering rebates on its highest selling models like Maruti Suzuki Alto to get back the sales numbers on the greener side. Indian car market saw sales growth rate of 26 per cent in 2009 – 2010 and a neck breaking 30 per cent in fiscal year 2010 - 2011. The sales growth rate slumped down to 1.6 per cent in June this year, an all time low in 26 months. Car manufacturers in India are now following the worldwide trend of issuing lower interest rates as part of the rebate.

In a bid to curb inflation, the central bank of India has increased loan rates 10 times in last 7 months. Even bigger companies like Volkswagen, Mercedes and Audi are offering low interest rates on their car models. Mercedes is offering its Mercedes Benz C Class model at zero per cent interest rates. Audi is also following the suit by offering Audi A4 at 0 per cent interest rate. Volkswagen on other hand is offering loans at 6.99 per cent interest rates on its petrol sedan, the Volkswagen Vento.

A Mumbai based banker said that the car companies are tying up with banks to offer loans at low interest rates to woo customers and to clear their piled up stocks. He further added that the discount strategy by the car companies will be carried way beyond the festive period as the interest rates are further expected to rise in coming times.

Honda Siel officials and dealers are busy explaining their move to offer such huge discount on Honda Jazz. They said that the move is in accordance to clear the stock of the Honda Jazz remaining as the company is planning to launch a revamped version of it pretty soon. Honda Jazz could not stand in the market against its rivals, Maruti Suzuki Swift, Volkswagen Polo, and Hyundai i20. The main reason behind it was the high pricing of Honda Jazz, selling at INR 7 Lakhs. Honda sold 643 units of Honda Jazz in the April to June quarter as compared to sales of 1050 units last year, a dip of 39 per cent in sales. Even after a price cut of 66,000 Rs. on its best selling sedan, the Honda City, a few months before, Honda is now offering a further more discount of INR 50,000 on the same.

Hyundai Motors is currently offering discounts upto INR 45,000 on their top selling small cars, the Hyundai i10 and Hyundai Santro Xing and is also offering discounts on Petrol cars equivalent to the difference between the petrol and diesel cars. Fiat India Motors is also giving discount rates of almost 1 lakh and are offering customers an option to buy diesel car instead of a petrol car.