Honda's premium compact car Jazz is being sold at discounts of up to Rs 40,000 with attractive interest rates on loans as dealers look to clear stocks of the 2009 model.

The Jazz, coming at a price range of Rs 6,98,000 to Rs 7,33,000 (ex-showroom Delhi), had witnessed stock pile up last month with retail sales not picking up.

According to the Society of Indian Automobile Manufacturers, Honda Siel Cars India  had produced 1,066 units of Jazz in December 2009, while selling only 269 units.

Many dealers of HSCI across the country have started offering special incentives, including discounts of up to Rs 40,000 and lower interest rates of up to 5.8 per cent since the beginning of this month.

The company, however, said the discounts were an initiative by the dealers and it has no plans to cut the price of the car.

"We started the scheme in early January and it will run till end of the month. The discount of Rs 40,000 is intended to clear up last year's stocks," a salesperson of a Delhi-based dealer, who did not want to be identified, said.

Another showroom owner of HSCI in Delhi NCR said, "We are not giving direct discount.

Rather we are going for special finance benefits like making available low interest rates." A Pune-based dealer said Jazz 2009 model is being offered with a special finance scheme at interest rate as low as 5.8 per cent against 9.5 per cent normally.

"I have sold a few units in last few days," he said.

Image: Honda Jazz. | Photograph: Rajesh Karkera