Braking point: 1st time ever! Maruti shifts gears to discounts on top models – What car lovers need to know

With demand for cars somewhat muted, partly due to the inauspicious Shrad period and partly due to an excess of inventory, dealers are offering discounts on models such as Maruti Suzuki’s premium hatchback Baleno, the new Swift and the new Dzire, possibly for the first time since their launch. The Swift and Dzire can be bought at cash discounts of up to Rs 15,000 and Rs 10,000 on diesel and petrol variants, respectively.

The Baleno can be picked up at a cash discount of up to Rs 10,001 till the end September if the dealer has it in stock. Some dealers have been offering a discount of up to Rs 15,000 on the Ignis for a couple of months now. In addition to cash, select dealers are also offering corporate discounts and consumer offers.

Dealers said it was possible the discounts would be offered right through to the festival season in early November. While the rising prices of auto fuels are a concerns, there is some concern also about the availability of financing due to the liquidity crunch in the money markets and rising interest rates.

The availability of adequate stocks has led to a reduction in the waiting period for models such as the best-selling Baleno — from three to four months, the waiting period in one Noida dealership is down to two to three weeks.

In Mumbai, dealers are able to deliver the car in less than two weeks. Maruti Suzuki’s new facility in Gujarat commissioned in April is supplying an adequate number of the vehicle, dealers said.

Analysts believe that high fuel prices and rising borrowing costs have proved to be a dampener in the last couple of months. “We were expecting passenger vehicle sales to slow down in the second half of the financial year. High fuel prices, interest rates going up have contributed to it. Automakers also filled dealer stocks aggressively resulting in large stocks,” said Gaurav Vangaal, senior analyst, IHS Markit.

Dealers said it was important to keeping pushing out stocks, which is why some discounts were being offered.

Passenger vehicle industry volumes declined by 2-3% year-on-year in August 2018 due to the floods in Kerala as this state accounts for almost 8% of industry volumes. Moreover, the shift in the festive season this year has resulted in a delay in inventory in build-up at the dealer end. Maruti’s overall volumes declined by 3.4% year-on-year to 158,189 units led by a 2.8% year-on-year decline in domestic volumes and 10.4% year-on-year decline in exports. In terms of segments, volumes declined in both the premium hatchback and entry-level sedan and SUV segments while premium sedan Ciaz volumes grew due to the launch of a refurbished model.