New Delhi: Maruti Suzuki, Hyundai, Tata Motors and Mahindra and Mahindra, nearly all major manufacturers of vehicles are giving out heavy discounts ahead of festive season. As the production has ramped up recently, all major manufacturers are trying to bring down their inventory, specifically for entry-level models. According to Maruti Suzuki India Ltd, the total industry inventory has gone up to 2,12,000 cars from 1,20,000 at the beginning of the year. Higher stocks indicate better production, but the industry must now match it to the underlying demand for specific models as bookings continue to increase.
“Now that we have been close to 95% of our production plans for the last few months, the big challenge for Maruti Suzuki and other manufacturers will be to produce vehicles according to the underlying demand pattern. We have a lot of pending bookings, but at the same time, we see wholesales coming in higher than retail sales. This can only happen when production is not matching actual demand; so matching this with pending payments is a big challenge going into the festive season, where we will see more bookings come in,” Shashank Srivastava, executive director, Maruti Suzuki told Mint.
The trend of offering heavy discounts is already visible in the case of entry-level two-wheelers, where production is much higher than demand.
“You can expect to see higher discounts in the festive season, where supply exceeds demand,” Srivastava said, adding that smaller cars such as the Alto 800, S-Presso, WagonR and even the Vitara Brezza—which is being replaced by a new model simply called Brezza—will see higher discounts, compared with new and fast-moving models in the sport-utility vehicle (SUV) segment.
For customers, this translates into a discounts bonanza, especially on entry-level or smaller cars.
“We are expecting strong festive sales this year, starting with Onam. While the demand outlook is very strong, in the last two years, the supply side has been trying to catch up due to part shortages for various reasons. We expect this gap to continue even in the festive period. Therefore, to cheer customers and keep the festive spirit high, we have rolled out consumer offers in the range of ₹20,000 to ₹40,000, depending on the model and trim. We are also offering attractive finance schemes and exchange bonus benefits,” Rajan Amba, vice-president of marketing, sales and customer care at Tata Motors’ passenger vehicles division told Mint
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