THIS DIWALI CARMAKER TO SKIP BIG DISCOUNTS

CARMAKERS have cut festival discounts to the lowest levels in at least three years this season,thanks to booming sales that have led to waiting periods of up to five months for popular models.
Maruti Suzuki,Hyundai Motor India and Tata Motors have all drastically cut their discounts to push sales in the third quarter of the financial year,normally considered best period of the year.
At a time when we are trying hard to meet the market demand,discounts dont seem to be an viable option to boost sales, said Mayank Pareek,managing executive officer (marketing & sales),Maruti Suzuki.
Maruti is currently unable to keep pace with customer demand for nine out of its dozen models.
While the discounts would stay,it would be around 20% less over the same period of last year, said Mr Pareek.
Several cars including the Maruti Alto,Wagon R,Hyundai Santro,Tata Indica,Fiat Palio and Ford Fiesta were discounted up to 15-20 % of their price during the festive season until last year.
This year,its a different story.Santro,for instance,had a discount of more than 50,000 during the festival season in 2007,which went down to 40,000 in 2008 and 37,000 in 2009.The discount is expected to be lower this year.
Where is the room for discounting when we are desperately trying all means to meet market demand, Hyundai director sales Arvind Saxena said on the launch of the new i10 hatchback.
Toyota Innova is another case in point.After increasing price by up to 29,000 on its complete range,Toyota is giving a discount of 30,000 on its Innova MUV this year.The same vehicle carried a rebate of 60,000 in 2007,which came down to 52,000 in 2008 and with a new variant being launched in 2009 carried a discount of 35,000 in 2009.
However,there is one exception to the drive to cut discounts.Honda Siel Cars is offering freebies and discounts of up to 55,000 on its Jazz hatchback.The company is also offering free insurance covers for the City,Civic and Accord models this festive season.
Car sales have increased more than 30% in the first six months this fiscal year,changing the market condition completely and forcing long waiting periods on several models including Maruti Swift and Eeeco,Hyundai i20,Volkswagen Polo,Ford Figo,Toyota Fortuner and Tata Nano.
And carmakers are busing ramping up production capacity to keep pace with demand and ensure peeved customers dont turn to rival models.
The rise in demand this year is despite increase in car prices.Vehicle prices are higher due to excise duty and road taxes;interest rates are also higher, said Mahantesh Sabarad,auto analyst,Fortune Financials.
PRABHAKAR MANI
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