Thursday, November 13, 2014
By Kamal Swami
Low sales in month of September compels car makers to offer discount on cars
Price hikes are around the corner, but for now, it's raining discounts for car buyers. With no clarity on an extension of excise duty cuts beyond December 31, and cost pressures mounting, auto makers are expected to increase prices in January - in fact, some popular models may see a hike in prices over the next few weeks. Withdrawal of the tax benefits announced in February alone could make cars costlier by 4-6%. Ahead of that, carmakers have sweetened the offers to push sales, as the all-important festival season has turned out to be one of disappointment.
According to industry executives and based on various offers from auto makers , the level of discounts and benefits has peaked to a record high of 10-15% of the cost of vehicles. The offers include cash discounts, free insurance and exchange bonus. In the luxury end of the market, manufactures are adding attractive finance packages to make the brands more easily accessible.
The year-end is approaching, too. Auto makers traditionally offer higher discounts during this period and in March to entice buyers who may otherwise wait for the New Year, calendar or fiscal, to make the purchase. "Without exception, the year-end tends to offer the best deal to the customers," said Anuraag Mehrotra, executive director for marketing, sales and service at the Indian unit of Ford Motor. "The uptick in the industry has not been to the extent expected. However, consumer sentiment is still strong, so everyone wants to cash in on it," Mehrotra said.
Read complete story at Economic Times