Car makers dole out luring offers to attract sales

Car manufacturers will lure Indian customers this festive season by offering discounts and complimentary add-on features without changing the price of their cars. Car market is facing a sluggish demand owing to the ever increasing fuel prices and interest rates on loans. So doling out freebies by nearly all car producers is becoming a ritual these days so as to attract sales. Hyundai India, Maruti Suzuki India, Toyota India, Honda India, Fiat India and Volkswagen India-nearly all big names in car market are strategizing hard to clear their stocks this Diwali by attractive offers like sharp cash discounts, eased lending rates, next to zero insurance rates etc.

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The move has come soon after the double whammy of inflation hitting hard on the pockets of common man in India. Forget about sedans, even the affordable hatchbacks are seeing their worst period ever. While Oil companies increased the petrol price by Rs 3.14 a litre recently, RBI hiked repo rate by a smashing 25%. The effect now have cascaded affecting the low footfall at car showrooms and even lower car purchases. Overall car sales fell by 16 % in July and 10% in August. But like every year, all car companies have high hopes from the festive season. While Volkswagen initiated this system, other companies will follow it. Volkswagen started offering Volkswagen Polo Breeze and Volkswagen Vento Breeze earlier this month. Under the 'Breeze ' scheme, additional features like rear parking distance control, navigation system (GPS) and leather seat covers are being offered without any extra charges to the customers. Also, Honda had cut the price of its Jazz hatchback by Rs 1.6 lakh and the City sedan by Rs 66,000. In their support, the dealers are still offering more discounts on the City model to attract buyers.

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But since sales were not able to pick-up after luring offers even during Ganesh Chaturthi and Onam festivals, car companies are showing a lot of skepticism for further discounts in the festival season ahead. Neeraj Garg Director (passenger Cars) at Volkswagen India confirming the continuation of ‘Breeze’ offer said that the market is shrinking and is likely to remain depressed. The festival season is definitely going to be tough. Janaeswar Sen, Senior Vice President (sales & marketing) at Honda India said the level of discounts will depend on the targets set by the companies. Mayank Pareek, managing executive officer (sales & marketing) at Maruti Suzuki also resented the market scenario by saying that the growth is coming at a cost and margins will be affected.

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