Lower car sales, massive inventory led to price discount race: Maruti chairman

Mahindra recently announced a price cut on the XUV700 SUV by more than ₹2 lakh, while Maruti has offered discount of nearly ₹3 lakh on Jimny.Tata Mo
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Jimny XUV700
Maruti Jimny (left) and Mahindra XUV700 (right) are two of the cars in India which have received huge discounts in July as major carmakers are offering incentives to customers this month.
Jimny XUV700
Maruti Jimny (left) and Mahindra XUV700 (right) are two of the cars in India which have received huge discounts in July as major carmakers are offering incentives to customers this month.

July is increasingly becoming the best month this year so far for new car buyers in India with major carmakers doling out lucrative offers with discounts and price cuts on popular models. From models like Mahindra XUV700 and Tata Harrier to electric vehicles like Tata Punch EV or BYD Atto 3, price revisions and incentives have allowed customers to save in lakhs when purchasing a new car. Offers have been rolled out on some of the models which have barely passed a year since launch.

Discounts on cars are usually rolled out every month with offers mostly coming from the dealers. What makes July slightly different is that some of these offers and price cuts have been officially announced by carmakers. The reason behind these offers could be multiple, said RC Bhargava, Chairman at Maruti Suzuki India Limited. According to him, slowdown in car sales along with massive stockpile of unsold cars are the biggest factors behind high discounts.

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Slowdown in sales

The price cuts and discounts have been announced a month after the Indian auto industry witnessed a drop in sales. June marked sales decline across the industry with the passenger vehicle segment clocking a drop of 7.18 per cent from May, according to retail data shared by Federation of Automobile Dealers Association (FADA). According to the dealers' body intense heatwave and delayed monsoon are some of the reasons behind slowdown in sales.

Also Read : Hybrid cars are less polluting than EVs, says Maruti Suzuki chairman. Here's why

Cars worth 60,000 crore remain unsold

The slowdown in sales coupled with unsold cars have led to a massive stockpile of cars in the industry. According to FADA, nearly 60,000 crore worth of cars are still languishing at stockyards. Manish Raj Singhania, President at FADA, said, “The total unsold inventory in the market will be 600,000-650,000 units and their average ticket size should be 9.5 lakh. The last two months itself saw stock get pushed up by 77,000."

Also Read : Is now best time to buy XUV700? How Mahindra SUV prices fare vs Creta, Seltos

Bhargava said carmakers usually aim to adjust production during such time to offset both the factors. in an interview to Mint, he said, "Every company today has increased discounts because of the inventory situation. There is greater supply than demand, and demand and supply determine pricing." Bhargava also expects the sales numbers to get back to normalcy this month.

Price cuts, discounts galore in July

Maruti Suzuki is offering big discounts on its popular models in July, including the Jimny which gets nearly 3 lakh incentive. Mahindra XUV700 is among some of the popular cars which has received the biggest price cut in July. One can save up to 2.20 lakh on purchase of the SUV. The carmaker said the price cut is a one-time offer to celebrate third anniversary of the SUV. Tata Motors too has coincided their discount on SUVs with the landmark achievement of delivering 20 lakh units since 1991. The offer is valid on all SUVs in its fleet.

Electric vehicles have also witnessed heavy discount this month with Tata Motors taking the lead by offering up to 1.30 lakh incentive on Punch EV, Nexon EV and Tiago EV. Chinese EV maker BYD has also launched more affordable variants of the Atto 3 electric SUV which could help it take on the likes of Nexon EV and MG ZS EV too.

First Published Date: 11 Jul 2024, 10:37 AM IST
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