NEW DELHI: Here's proof that the Indian car market has hit a new low: Maruti Swift is available at a discount for the first time since its launch, and there's no waiting for delivery.
With other top performers such as sports utility vehicles Mahindra XUV500 and Toyota Fortuner, too, now available off the shelf. As rising fuel prices and lack of policy incentives wither away demand, carmakers are now offering highest discounts in several years to push sales, industry insiders say.
"Bookings have come down drastically and there's no real waiting on any model. The market is even worse than December 2000, when car sales had dipped by a massive 40% year on year," a senior marketing executive of an automotive company said. "From 12-15% discounts in the earlier months of this fiscal, many models are available at 20% less than their official price," the person said.
Swift — which maintained strong sales traction ever since its launch in June 2005 to become one of Suzuki's biggest global successes — ended its discount-free run this month. "We are currently facing perhaps the toughest times in the past several years. The customer test-drives, rate of conversations of car bookings to retail sales all have declined in recent months," a Maruti SuzukiBSE -1.67 % dealer said. "While waiting on all models has vanished, the lacklustre Budget has changed the swing even for models like Swift that have enjoyed huge waiting until last month."
Maruti now offers a straightRs5,000 cash corporate discount on Swift that covers its highly sought-after diesel variant and promises instant delivery, the person said. Some dealers too are offering cash discounts on Swift besides up to Rs10,000 off on select variants of the hugely successful Dzire compact sedan in select markets like Bangalore and Mumbai to increase footfalls in the showrooms.
Maruti Suzuki, however, denied any discount on Swift for retail customers. "This is not true. There is no discount for retail customers. There may be offers for certain bulk deals," a company spokesperson said in an email response to ET. "We have consistently ramped up production of Swift to meet customer demand," the person said.
An industry insider said Maruti has identified more than 100 corporates including ABB, Canara BankBSE -3.21 %, LIC, Jet AirwaysBSE 1.45 %. Larsen & Toubro and Vodafone to be eligible for direct cash rebates.
The slowdown in the market has hit the popular SUV segment too due to price increases following the Union Budget proposal in increase duties on sports utility vehicles and highend imported vehicles. Thanks to the success of vehicles such as XUV500, Fortuner and Renault Duster, the SUV segment has been booming even as car sales have been struggling throughout this fiscal.
Trade insiders say most carmakers have increased discounts and freebies to the highest levels in several years to woo consumers to showrooms. While Tata MotorsBSE -4.79 % and General Motors have reduced prices on their select cars, top two, Maruti Suzuki and Hyundai Motors, have increased the quantum of discount on their popular cars.
German carmaker Volkswagen is giving its new Vento in exchange of its old car, while Skoda has introduces an EMI holiday for one year on its Rapid sedan. "Keeping in mind the prevailing market sentiments, we have introduced this innovative scheme for consumers," Skoda's marketing head Kamal Basu said. Industry officials say carmakers had to increase rebates because of there was no incentive from the budget and the Reserve Bank's move to cut benchmark interest rate by 25 basis points is not good enough to inspire a revival in demand.
"We need at least 100 basis points reduction to revive demand and pull some growth in this industry," Sugato Sen, deputy director general at Society of Indian Automobile Manufacturers,