Carmakers Intensify Price War With New Cars

Published: Monday, August 22, 2011, 13:03 [IST]

The Indian small car scene was never this hot. With a line up of brand new models and several in the pipeline carmakers are trying to attract buyers. While the hike in petrol prices and interest rates might have lead to buyers postponing a purchase, carmakers are wooing them by offering new cars at astoundingly low prices.

The new Maruti Suzuki Swift has been developed with an investment of Rs.550 crore. It gets 140 visible changes and yet it costs just Rs.13,000 more than the model it replaces. The Swift is Maruti Suzuki's highest selling model and the carmaker did not want to lose its market share by increasing the price of the new Swift. It is another story that Maruti Suzuki received more than 50,000 bookings even before it announced the price of the new Swift.

Honda which has now entered the price war with its new face lifted Jazz premium hatchback. The previous jazz cost Rs.7.4 lakhs. The Japanese carmaker than offered a Rs.1.75 lakh price discount to clear its inventory. It managed to sell its entire stock of Jazz hatchback within three days. What shocked us all was the new face-lifted Jazz is cheaper than the old Jazz even with the Rs.1.75 lakh discount. The new Jazz costs Rs.5.5 lakhs and Honda has not reduced any of the premium features. In fact the new Jazz has many more features as standard which were previously optional.

Toyota is trying to gain a huge foot hold in the Indian car market by launching two new models. The Etios sedan and the Etios Liva hatchback are both entry level cars. The Liva costs just Rs.3.99 lakh and is Toyota's cheapest car in India. The Liva is competing directly with the Swift, Hyundai i20 and Ford Figo.

Apart from the newly launched cars, carmakers are also reducing prices of their current models too. Honda has already reduced the price of the City sedan by Rs.66,000. Car sales are not expected to grow at the rates witnessed in the last two years and carmakers are keen to keep themselves in the black. While some carmakers are reducing prices, there are some who are offering discounts and freebies to attract sales.

Carmakers are risking reducing their margins in the quest for sales. The real beneficiary of this price war amongst carmakers is the car buyer. So what are you waiting for. Grab this opportunity and choose your favourite car before carmakers decide to change their plans.

Article Published On: Monday, August 22, 2011, 13:03 [IST]

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