Car Makers Roll Out Discounts As Sales Continue to Slide

Car sales have been sliding for eight months in a row as buyers shy away from new purchases.

Three months into the new financial year and the mood is still somber in the automotive industry. Overall sales are down across car makers for the third month in a row, despite some new launches trying to shore up numbers. It’s not much different in the two wheeler segment as well. In fact, sales have been on a downward trend for eight months now.

Sentiment has not improved even after the general elections owing to a variety of factors. This includes buyers holding off purchases waiting for newer models that will come in after India’s new safety norms take full effect. Not just that, predictions of a below average monsoon, rising fuel prices and a slowdown in the economy is also weighing on consumer sentiment.

Month after month, car makers and two-wheeler makers are seeing a drop in demand in India.

June 2019 Sales in India

What are car makers doing to try and boost demand?

Maruti Suzuki has seen a drop of over 17 percent in June sales numbers compared to the previous year. So much so it is now offering discounts of up to Rs 70,000 on some models of its Ignis, S-Cross and Ciaz. Even a high-selling model like the Maruti Suzuki Baleno is being offered at a Rs 45,000 discount (but this is mainly to stave off competition, from the Toyota Glanza, which is a re-badged Baleno).

Toyota, which recently launched the Glanza, hasn’t been able to shore up its numbers. Sales are down about 19 percent from the previous year.

Hyundai sales have dropped 7 percent despite an uptick in numbers thanks to the launch of the Hyundai Venue (that sold over 7,000 units). It is offering deals of up to Rs 30,000 on its other models, except for Creta and Venue, which continue to see good demand.

Mahindra has had a better year, but that’s mainly thanks to new models such as the XUV300 and the Marazzo that have helped it grow about 3.8 percent year on year. It’s older models like the XUV500 and Scorpio have seen sales drop.

Tata Motors isn’t having a good run despite its new launches. It has sold about 10,000 units of the Harrier in the past six months, but sales of the Tigor and Tiago have dropped considerably. The Tata Nexon is holding steady, but overall Tata sales are down 27 percent year on year. Tata is doling out discount benefits (including insurance freebies) of up to Rs 53,000 on select models.

At Ford, it’s still gloomy, with sales of the new Aspire and Figo not gaining traction. Ford is offering benefits of up to Rs 40,000 on select models of Aspire and Freestyle.

Two-Wheeler Slowdown

Among two-wheeler makers, Royal Enfield has seen a big drop in demand compared to June 2018. While it isn’t offering discounts on its bikes, it is offering discounts on accessories and riding gear.

Hero MotoCorp, the largest two-wheeler maker in the country, has seen a drop in demand as well. This is due to the drop in demand from rural India and a drying up of loans from NBFCs. Still, it managed to sell over 6 lakh bikes in June.

Suzuki is among the few manufacturers that has seen growth in June 2019 compared to the previous year. This comes on the back of its new launches - the Gixxer 150 and 250 bikes.