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Automakers are offering record high discounts in the last month of 2019. These offers, ranging from 5% to 15% and continued through the year for most, may well be in its last leg, said industry executives, as the Bharat Stage-IV stock that the companies are trying to liquidate before the new emission standards come into place is fast depleting. Several of the companies are set to increase prices from January.
This is indeed the best time to buy, said Sashank Srivastava, the executive director for sales and marketing at Maruti Suzuki. “We have almost sold out our BS-IV stock. The discount levels are some of the highest (where the options are still available); this is not sustainable. Price hikes will inevitably come from January on various counts — emission norms, safety norms, currency fluctuations…,” he told ET.
Typically, automakers offer the highest discounts of the year in December. The month accounts for around 8% of the total industry sales volume and last year, sales growth was flat at 2.38 lakh units in December.
Maruti Suzuki, the nation’s largest carmaker, is offering discounts of Rs 37,000-89,000. The least discount is on the EECO and the highest is on the Vitarra Brezza. Hyundai’s offers range from Rs 20,000 to as much as Rs 2 lakh for the Elantra and Tuscon.
Tata Motors vehicles can be purchased with a discount of ?77,500 on the hatchbacks to as much as ?2.25 lakh on the Hexa.
Vikas Jain, the national sales head at Hyundai Motor India, said the current offers were among the highest in the year and should support retail sales growth in the ongoing month. However, “the wholesale number of the industry may vary with production plan and inventory status of individual company”, he added.
Many buyers are holding on to their purchase in the expectation of a fire sale of vehicles ahead of the introduction of BS-VI standards in April, as the market had witnessed in March 2017 for two-wheelers amid the transition to BS-IV from BS-III at the time. However, a low inventory and rising proportion of BSVI vehicle in the total production will reduce the extent of the fire-sale prospect, particularly for large volume vehicle, industry executives said.
But it may still happen for few low-volume vehicle, often said as “dead” stock in dealer parlance.
Federation of Automobile Dealers Associations president Ashish Kale said enquiry levels in December had shot up and it appeared to be a normal December month — when demand is typically strong. “We are hoping for a strong conversion in the second half of December. With the BS-IV stock running out, the pressure to give discounts will ease,” he said.
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