Car sales slump: Sky-high discounts fail to entice buyers

Maruti Suzuki Ertiga | 3 stars | The second car from Maruti Suzuki, the Ertiga scored three stars for adult occupancy. The car does still manage to get three stars for child protection though.

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Monthly car sales took a nosedive for yet again as buyers remained reluctant to make purchases in September, despite discount breaking all previous records.

Rising fuel prices, anticipation of a GST cut on automobiles, and a further increase in discounts and Shraad period hampered sales in September despite banks easing lending norms.

Car market leader Maruti Suzuki recorded 27 percent decline in domestic passenger vehicle sales during the month to 110,454 units. The decline came despite almost each of its models offering a discount. The Delhi-based carmaker had clocked 151,512 units sales in the same month last year.

Its compact and mini segment comprising Wagon R, Swift, Alto and Baleno recorded a fall of 29 percent preceded only by the mid-size segment which recorded a slump of 73 percent. Utility vehicle saved the day with a fall of just 0.5 percent during September.

Utility vehicle specialist Mahindra & Mahindra reported 33 percent decline in passenger vehicle volumes in September to 14,333 units as against 21,411 units sold in the same month last year.

Veejay Ram Nakra, Chief of Sales and Marketing, Automotive Division, M&M, said: "We are positive that this festive season, with the onset of Navratra, will augur well for us and the automotive industry. This, in addition to factors such as the good monsoon and recently announced positive government initiatives should help revive the industry in the short term."

Tata Motors domestic passenger vehicle sales crashed 56 percent to 8,097 units during September as compared to 18,429 units sold in the same month last year. Tata Motors rolled out one of its biggest discount offers wherein it offered the Hexa at a discount of 1.5 lakh and the Nexon at Rs 85,000 discount. The continued poor performance has pushed the company to the sixth spot from fourth spot earlier.

"Towards the end of the month, there was an encouraging response in terms of customer foot falls. The customers have responded well to our festive offers as reflected in 11 percent more retail in September 2019 compared with August. However, the industry continued to decline in September," said Mayank Pareek, President, Passenger Vehicles Business Unit, Tata Motors.

Toyota Kirloskar, the maker of Innova and Fortuner, recorded 18 percent decline in September domestic sales to 10,203 units as against 12512 units sold in the same month last year.

Raja, Deputy Managing Director, Toyota Kirloskar Motor said: "The consumer sentiment continued to be subdued in September which has reflected in the sales slowdown in the industry. Thanks to the Navratri and Diwali festive sparkle around, we expect the consumer demand will see the much needed revival resulting in better retails."

Honda Cars India sold 9,301 units in September marking a fall of 37 percent compared to 14,820 units sold in the same month last year.

MG Motor India, which sells the Hector mid-size SUV, said it clocked retail sales of 2608 units in September. The British auto brand, which had to close bookings of the SUV following robust demand, reopened bookings in end September. The company has hired additional manpower to support the second shift operations which would boost production.