With sales in the slow lane, car companies ramp up September discounts

Carmakers are offering deeper discounts in a desperate push to entice buyers and clear inventory as sales remain sluggish.

Starting this month, the level of discounts has risen to 12-14% of the average selling price (ASP) of a vehicle from 10-12% in August. For some models, total discounts offered are well over ₹3 lakh which include cash discounts and corporate benefits.

In just one month, utility vehicle maker Mahindra & Mahindra has increased the discount on its Scorpio Classic SUV model to ₹100,000 from ₹20,271 in August. The absolute benefit may vary in each city depending on the stock and demand scenario, according to dealers. M&M has also made buying the three-door Thar SUV model more attractive by sharply boosting the consumer benefit to ₹150,000 this month from ₹20,000.

“As part of the festive season every year, we run targeted sales acceleration schemes and we have done the same across a select part of the portfolio this year as well,” said Nalinikanth Gollagunta, CEO, automotive division at M&M.

Similarly, Honda’s Amaze sedan has benefits totalling up to ₹112,000 this month, up from ₹96,000 last month.

Sales up just 1% in first five months of FY25
Total benefits on the City sedan have also inched up to Rs 114,000 from Rs 88,000, while the Elevate SUV has an additional offer of Rs 10,000, taking the total benefits to up to Rs 75,000.

“There’s definitely a struggle in generating fresh demand,” said Kunal Behl, vice president – marketing and sales at Honda Cars India. However, he believes with the start of the festive season, “the worst is over”.

The heightened discounting trend comes ahead of the Shradh period, considered inauspicious by Hindus, especially in North India for making big-ticket purchases. This is likely to dent sales further in the coming weeks. However, the two-wheeler segment has been largely unaffected by the heavy discounting trend in the passenger vehicle segment with benefits staying constant at about 5% of the ASP. Green shoots in rural demand has helped propel sales of entry level two-wheelers to some extent, which is expected to improve further in the coming weeks, said dealers.

Tata Motors was the first to launch aggressive sales initiatives such as price cuts and consumer offers to revive demand. More are joining the fray before the dry sales spell of Shradh starts September 17 and runs till October 2.

Car market leader Maruti Suzuki India has increased discounts on select models. While the offer on its popular Wagon R hatchback has jumped to Rs 62,000 from Rs 47,000, those buying the Baleno hatchback can avail a discount of Rs 100,000, up from Rs 58,000 previously.

Partho Banerjee, senior executive officer (marketing and sales) at Maruti Suzuki said the company has “been consistent with its sales promotion” in the last two months. “We will see upside in the industry from now onwards. However, if you compare with last year, growth may seem muted because of the high base of last year,” he said. Maruti’s deliveries are up 10% in Kerala due to the Onam festival, and also in Maharashtra because of Ganesh Chaturthi festival.

On whether discounts necessarily result in higher sales, Behl said, “It helps when you are offering more than others but if everyone is at the same level, it doesn’t help much in extracting the numbers.” But it definitely helps in advancement of purchase by buyers, he said.

Tata Motors on Tuesday announced a festive offer of up to Rs 300,000 on its electric vehicle range as part of its ‘Festival of Cars’ campaign till October 31. A day earlier, the company announced benefits (including a limited period price cut) of up to Rs 2.03 lakh on its petrol, diesel and CNG range. Car sales rose only 1% in the first five months of the fiscal year due to an extended general election, weather related disruptions in Telangana, Gujarat, and Kerala.

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