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High Petrol Prices And Interest Rates Force Carmakers To Offer Discounts
Carmakers in India that are considering discounts and incentives as a short term solution to reduced car sales are Maruti Suzuki, Hyundai, Ford, Fiat, Tata Motors and General Motors. Car discounts can sum up to Rs. 60,000 once they are made available. Shashank Srivastava, the chief general manager (marketing) at Maruti Suzuki said: “Going forward, better packaged discounts is the best strategy to increase footfalls."
General Motors is offering a Rs. 10,000 loyalty bonus in its exchange scheme. Honda is offering free insurance and gizmos for its City sedan. Even sports carmakers are offering incentives. Porsche is offering a loans at 2.5 % on the Cayman and 911 while Mercedes-Benz and Audi are offering 0% interest rates on some models.
Carmakers in India are in a catch 22 situation as they are being forced to increase prices due to increasing commodity costs. Discounts have become a necessity as the increasing petrol prices and bank interest rates have made buying cars an expensive affair to the customer.
Indian carmakers appear to have been falsely boosted by the previous year's sales growth and they were expecting similar if not better sales this year as well. However they do not appear to have been prepared to highly volatile aspects such as petrol prices and interest rates. Although carmakers are increasing the number of diesel vehicles in their line-ups, the move is highly unlikely to be successful if the Indian Government decided to increase diesel prices as well.
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