Auto Manufactures Increase Dealer's Margin in Order to Boost Petrol Car Sales

Indian car makers like Maruti Suzuki India and Hyundai Motors have come with a new strategy in order to boost up the petrol vehicle sales, the automakers are going to hike dealers' commission and discount. Ealier in order to increase the sales dealers were offering a discount by cutting on their own pockets but the amount was not sufficient and was not able to bring in buyers. As the inventories were going high day by day, auto companies decided to increase dealers commission.

Maruti India dealers used to get 4% commission. The situation is changed as Maruti's share in the overall auto sales is going down, the company has increased dealers commission to more than double for the petrol car sales. The diesel vehicle sales are on a high and the diesel models accounts for almost 80% of the overall sales, this seems to be a trend with the overall Auto industry. Maruti's passenger cars in India share have toppled below 40%. Hyundai India not far behind in the race has also increased the dealers commission for the petrol models to about 8%.

This route is also being followed by General Motors and Tata Motors who have also increased the commission by 2%. This move along with the interest rate cut announced by RBI will surge the sales of petrol cars , which have gone down considerably since last two years.The price difference between the diesel and the petrol models these days is as much as 15-25%. The company can increase the dealers discount with the interest rate cut and the increased commission. All these discounts put together will make the purchase of petrol cars more alluring and the auto manufacturers expect to see batter sales in the coming months

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