Auto Manufacturers Slash Prices to Boost Sales

Due to a significant slowdown in the car industry, automakers are offering unprecedented discounts to attract buyers, with some discounts reaching into the lakhs. Popular brands like Maruti Suzuki, Honda, Mahindra & Mahindra, and luxury automakers such as Audi and BMW are offering reductions across a variety of models. For instance, luxury models like the Audi Q8 e-tron and Kia EV6 see discounts up to Rs 10-12 lakh, while Suzuki’s Jimny, a more compact model, is offered with discounts of around Rs 2.3 lakh. Analysts expect even greater discounts post-Diwali as manufacturers work to clear out high inventory levels.

It’s not only the standard models that are seeing substantial discounts; even popular models like the Toyota Innova Hycross and Mahindra 3-door Thar are now available at reduced prices. The Hycross, once celebrated for its ‘strong hybrid’ version and star status, has also felt the impact of the industry slowdown, with discounts starting at Rs 1.5 lakh, according to data from research firm Jato Dynamics.

Thar 3-door, impacted by the launch of its 5-door variant, is also discounted at Rs 1.5 lakh. Mahindra’s XUV400 electric is now offered with a substantial discount of Rs 3 lakh, making it an attractive option for buyers. In July, Mahindra had also provided a Rs 2 lakh discount on select versions of the XUV700.

Industry analysts predict that discounts will deepen after Diwali as dealers and manufacturers resort to “desperate measures” to clear excess inventory. Additional models expected to see significant discounts include the Maruti Baleno (Rs 1.1 lakh), Maruti Grand Vitara (Rs 1.1-1.4 lakh), previous-generation Scorpio (Rs 1.2 lakh), Toyota Fortuner (Rs 2 lakh), Jeep Compass (Rs 2.5 lakh), MG Gloster (Rs 4.9 lakh), BMW X5 (Rs 7-10 lakh), Audi A4 (Rs 8 lakh), and Mercedes-Benz S-Class (Rs 9 lakh).

Following a period of strong demand as the economy reopened after the Covid lockdowns in 2021, the car industry is facing challenges this year, with buyers showing less enthusiasm for new purchases than they did previously.

Most automakers are reducing production and scaling back dealer dispatches as inventory levels climb. This trend is seen among leading manufacturers such as Maruti, Hyundai, Tata Motors, Honda Cars, Volkswagen, Skoda, and Audi.

Ravi Bhatia, president of Jato Dynamics, explained, “The significant discounts represent just one aspect of the situation. The industry is grappling with a clear demand problem. The lower end of the market has been depressed for some time, and now even the high-end segment is facing saturation as the demand pool diminishes. This is not an issue confined to specific makes or models; it’s indicative of a broader, general slowdown.”