The recent slowdown in the Indian auto market has forced auto producers to offer new discounts and introduce new schemes to lure car buyers back to their showrooms and bring back the impetus shown in FY 2011.
The disappointing growth rate of 1.6 percent in the last month has left no option for the car makers but to cut their product prices. Honda was the first to do so, slashing the rate of its less selling Honda Jazz by some Rs 1.7 lakh as a limited period offer on Monday. Seeing Honda, country’s largest car manufacturer Maruti also launched a discount of more than Rs 50,000 on its best selling models Alto, WagonR and Estilo.
It all started with the Reserve Bank of India raising its interest rates and that with the double blow of raised fuel prices has added to the woes of potential car buyers. Interest rates have hopped by 300 basis points in one year, forcing carmakers to give some relaxation to their buyers if they are keen to sell their vehicles.
"We are just reacting to the market. Retail sales have taken a hit with a huge slump in customer's responses. To maintain our sales tempo, we have maximized the benefits on high selling models like Alto and WagonR in July as overall sales had turned negative in June," a concerned Maruti chief general manager (marketing) Shashank Srivastava said.
Volkswagen is also offering loans at 6.99 percent of interest rates on its Vento petrol sedan. Big luxury players like Audi and Mercedes are going for 0 percent interest rates on their Audi A4 sedan and C class sedan respectively.
