Maruti-fiat-chevrolet-hyundai-others offer discounts on new Cars to drive sales
Carmakers are offering discounts up to 20% on new units of models worst affected by a slowing demand and rising inventory, opening up more options for buyers.
Narinder Sethi, a cable operator in north Delhi, found this out to his pleasant surprise recently. He had ventured out to buy a second-hand Swift hatchback, but he returned home with a brand-new Estilo. The small car from the Maruti Suzuki stable cost him Rs 2.65 lakh excluding taxes, nearly a fifth less than the regular ex-showroom price, and cheaper than the available pre-owned Swifts.
Along with Maruti Suzuki, most carmakers are offering lower effective retail prices, by slashing ex-showroom prices or by offering cheaper loans, especially on their petrol models. Fiat Punto, Chevrolet Spark and Hyundai Accent sedan are just some of the other models available at steeply slashed prices.
"There is a marked difference in the retail prices of cars with huge inventories being piled up as the festive period failed to live up to the expectations," said a Delhi-based Maruti Suzuki dealer, "Companies are offering huge discounts across models, the highest in the past three years, but it's the petrol cars where discounts are the highest."
Auto financiers say companies are also offering discounted interest rates on new cars to spur demand, even as they stand to make up the difference to the lender. Czech carmaker Skoda Auto, for instance, is offering a flat 9.99% interest, against the current market rate of 14%. Honda is offering cars at an even lower 9% interest.
"In the slowing market, companies have bundled up options to bring down the actual price burden of the customers. Now many cars are virtually priced at par with the used cars as companies are forced to offload their inventories, which have almost doubled in the past two months," said a senior executive of HDFC Bank, the largest private lender in the Indian automotive market.
As in the case of Sethi, this can also result in a prospective second-hand car buyer settling for a new car. "The fabulous price, along with the possibility of owning a new car, persuaded me to go for the Estilo," says Sethi, "Buying a new modern car with modern technology is more prudent than buying any of the used cars." It makes for greater savings for those who plan to buy on credit as most banks and financial institutions charge 2-3% higher rate of interest on pre-owned cars. Maruti, Fiat, Chevrolet, Hyundai, others offer discounts on new cars to drive sales - The Economic Times