Few discounts on new cars this Diwali as demand outgrows supply: Report
The average incentive on a new car in October this year was a little over Rs 12,000, half of what it was last year.
Due to a shortage of vehicles, the Indian passenger vehicle industry has become a sellers’ market, and automakers have offered little to no discounts on new cars this year during the run-up to Diwali, a period when deals and schemes generally peak, according to a report in Business Standard.
Discounts are routinely doubled during the Diwali month, when sales are also typically high, to entice customers in India’s extremely competitive vehicle industry. However, according to statistics from automotive consultancy firm Jato Dynamics, the average incentive on a new car in October this year was little over Rs 12,000, half of what it was last year. In October 2021, the average incentive was three times higher.
Because of the semiconductor shortage, automakers have a limited number of automobiles they can manufacture. Meanwhile, customer demand has been rapidly increasing, particularly in the premium car segment. The Federation of Automobile Dealers’ Associations head, Vinkesh Gulati, stated, “We don’t have vehicles to offer.” “When we’re attempting to sell anything in a slow market or competing with a competitor brand or dealer, the issue of discounts arises,” he explained. Simply look at shop sales during the Navratri and Dussehra periods to get a feel of the supply constraint. According to industry estimates, only 85,000 passenger automobiles were sold during the Navratri-Dussehra period this year.
According to industry estimates, only 85,000 passenger automobiles were sold during the Navratri-Dussehra window this year, compared to 1,75,000 last year, as ET reported last week.
Waiting periods for popular models ranging from 5-6 months to as much as 12 months in extreme circumstances, which is unprecedented since India’s economic liberalisation.
“This kind of scarcity hasn’t been witnessed since the Licence Raj’s Premier Padmini, Ambassador era,” said Ravi Bhatia, head of Jato Dynamics. With huge waitlists for practically every model on the market, automobile buyers bartering on costs was quickly becoming a thing of the past, according to dealers. The focus of discussions today is on delivery dates.“The customer is saying just give me a car,” said Nikunj Sanghi, a dealer for Mahindra & Mahindra.
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