![2024 Tata Safari Discount of Rs. 70,000](https://www.motorbeam.com/wp-content/uploads/2024-Tata-Safari.jpg)
Low customer footfalls and rising dealer inventory have forced leading car manufacturers like Maruti Suzuki, Mahindra, and Tata Motors, to offer massive price cuts and discounts. These situations have made it the best time to buy a car due to this price war, with popular SUVs like the Maruti Suzuki Brezza, Grand Vitara, and Honda Elevate receiving substantial discounts. Additionally, the Mahindra XUV700, Tata Harrier, and Safari have also seen notable price reductions.
Rising Inventory and Discount Strategies
Dealers are grappling with an inventory situation of around 65-67 days, more than double the normal levels. This has compelled manufacturers to introduce attractive schemes to draw buyers into showrooms, even before the festive season begins. As growth slows and inventories rise, Tata Motors and Mahindra & Mahindra have engaged in a price war, offering massive price cuts and discounts on their flagship SUVs.
![2024 Mahindra XUV700 Temporary Price Cut Upto Rs.2 Lakhs](https://www.motorbeam.com/wp-content/uploads/2024-Mahindra-XUV700-1.jpg)
Tata Motors has cut prices on the Harrier by Rs 50,000/- and the Safari by Rs 70,000/-, depending on the model. Mahindra, in response offered a temporary price drop of up to Rs. 2 lakh on the XUV700’s premium AX7 models. In a stock exchange filing, Mahindra clarified that this price cut is part of their business strategy to lower the average price point and drive growth, aiming for mid-teens growth in the current financial year.
Sales Trends and Manufacturer Responses
Despite these offers, the sales response has been lukewarm. Tata’s flagship SUV’s have seen sales drop from over 2500 units in January 2024 to around 1,00 units in June. Similarly, XUV700 sales have also declined from around 7200 units in January to 5900 units in June. As a result, production of the vehicle has decreased to 6000-7000 units from the planned 10,000 units per month.
Maruti Suzuki, the country’s largest carmaker, has been offering multiple discounts on its Arena and Nexa outlets since January 2024. The brand introduced the Dream series line-up last month, garnering around 21,000 bookings. The Dream Edition includes entry-level models like the Alto K10, S-Presso, and Celerio, starting at Rs 4.50 lakh (ex-showroom) and featuring more equipment. The Brezza Urbano Edition, launched in response to a sales drop, offers more accessories at a discounted rate.
![Maruti Suzuki Dream Series](https://www.motorbeam.com/wp-content/uploads/Maruti-Suzuki-Dream-Series.jpg)
Hyundai continues to see strong sales for its best-selling model Creta, but models like the Alcazar and Exter are seeing a drop in demand. The brand recently launched the Exter Knight Edition and Exter Hy-CNG Duo in the hopes of boosting sales, while offering discounts of Rs 10,000-20,000/- on the standard Exter for the past few months. The Alcazar, facing a facelift launch, is offered with massive discounts of up to Rs 80,000/-. The Venue gets discounts of up to Rs 55,000/-, while the Grand i10 NIOS and i20 offer benefits of up to Rs 50,000/-.
Discounts Across the Industry
Almost every brand has jumped on the bandwagon. Germans brands like Volkswagen and Skoda are offering massive discounts and benefits of over Rs 1.5 lakh on most of their India 2.0 line-up. Honda too is providing benefits of around Rs 70,000/- on the Elevate, with sales dropping from 4500 units in January to 2100 units in June. The City also sees benefits of around Rs 1 lakh, while the Hybrid comes with higher discounts.
![2023 Honda City Facelift Features](https://www.motorbeam.com/wp-content/uploads/2023-Honda-City-Facelift-Features.jpg)
French manufacturer Renault is offering a discount of Rs 40,000/-, while Chinese manufacturer MG Motor is offering discounts from Rs 25,000/- to Rs 2 lakh.
Market Dynamics and Future Outlook
Industry experts note that the current discounting trends are a response to a lean season, inventory correction, and the desire to start the festive season on a positive note. Nikunj Sanghi, former President of the Federation of Automobile Dealers Association (FADA), attributes the situation to seasonal low demand due to rains and rural India’s sowing season.
Manish Raj Singhania, President of FADA, expressed concerns about the Rs 60,000/- crore worth of inventory in the dealer network across the country. With passenger vehicle inventory levels at an all-time high of 62-67 days, the market has shifted from supply-driven to demand-driven, leading to increased discounts.
Passenger vehicle dispatches from OEMs were the highest in May this year at Rs. 3.47 lakh units, but with moderate growth of 3.9%. The high dispatches have caused a demand-supply mismatch, which dealers hope will be corrected through ongoing discounts.
Top car makers anticipate demand moderation after two years of strong pent-up demand. Let’s see if these price corrections will persist and if there will be a significant pick-up in demand in the remaining half of the year.