Renowned automobile manufacturers Hyundai Motor India Ltd., Maruti Suzuki India Ltd., and Honda have decided to increase the discounts and dealers commission to enhance the sales of petrol vehicles in the country. A leading Maruti Suzuki dealer in North Delhi, said, "Petrol car inventories are increasing. Earlier, dealers were giving some discounts from their own thin margin but it was simply not working. Now, auto companies are increasing the dealer's commission, which is a positive sign.”
Earlier, the company used to pay four percent as commission to dealers for sales of petrol cars. The company now went ahead and increased the percentage paid to the dealers to 10 % being concerned by the shrinking market share of Maruti Suzuki. However, the commission on diesel variants remains unchanged. A senior executive from Maruti Suzuki India, said, "Yes, we have increased commission for dealers. This was part of the strategy to boost sale of petrol cars. At present, diesel models account for 80 per cent of sales and this is the trend across the industry.”
In the passenger car market, the share of the company dripped below 40 per cent. In last December, sales of diesel vehicles were better than the petrol models due to which 50 percent market share was acquired by the former. Apart from Maruti Suzuki India, Hyundai also increased the dealer commission for petrol models to 8 percent. Other auto majors like Tata Motors and General Motors have made 2 percent increase in the dealer commission to boost the sales.
According to auto dealers, this step of the car companies along with reduction in the interest rate will increase petrol cars sales in India, which have declined in last two years. A dealer of General Motors India, said, "At present, the price difference between petrol and diesel variants is as much 15 to 25 per cent. We feel that with the interest rate cut and increased commission, we will be able to offer more dealer's discount. It will make purchase of petrol cars attractive. We expect better sales in the coming months.”
