Discounts are back at car dealerships

Dealers said the discounts this March are higher than the same month in the previous year.

Soma Roychowdhury (name changed) is considering replacing her nine-year-old Honda Jazz with a compact SUV.

“I would wait till the markets improve so that I can liquidate some mutual funds to make a down payment. Also, once I have the appraisal letter, it will be easier to take a call as I will have clarity on my disposable income,” said this mid-level HR executive at a Mumbai-based firm.

Many like her are deferring their car purchases, and to lure these customers to the showroom, dealerships and auto majors are offering huge discounts in March.

With passenger vehicle retail sales falling 10 per cent in February, along with a muted growth outlook for 2025-26 (1-2 per cent), discounts are back at car dealerships.

They range anywhere from ₹35,000 to over ₹4 lakh for different models.

Dealers said the discounts this March are higher than the same month in the previous year. 

Automakers also admitted that discounts are necessary to push sales volumes.

Hyundai Motor India (HMIL) launched its 'Super Delight March' campaign with offers on its range of vehicles -- up to ₹55,000 on the Venue, ₹35,000 on the Exter, ₹50,000 on the i20 and up to ₹53,000 on the Grand i10 NIOS.

The company also launched a television commercial on the campaign.

“The discount levels this March are definitely higher than that of the previous year. Market sentiment is not good, and the outlook for auto sales growth is also not very bright. On top of it, dealers are holding inventory of around 50-55 days. In order to bring the customer back to the showroom, discounting is necessary,” said CS Vigneshwar, president, Federation of Automobile Dealers Associations (Fada).

Maruti Suzuki India's cars have discounts in the range of ₹35,000-1.1 lakh. Models like Ignis have offers upto ₹72,000 while the Invicto has benefits up to ₹1.1 lakh.

These benefits include a cash discount, a scrappage or exchange bonus, a corporate bonus, among others.

Tata Motors' electric vehicles (EVs) have discounts of up to ₹1 lakh (Tiago EV), and the popular EV Punch, too, has benefits of up to ₹90,000.

On internal combustion engine (ICE) cars, Tata Motors' models have discounts of up to ₹1.35 lakh (Altroz).

Mahindra and Mahindra's (M&M's) XUV 3XO has benefits of up to ₹60,000 this month, while some Volkswagen models like Taigun (₹2 lakh) and Tiguan (₹4.2 lakh) are also seeing price cuts.

Discounts vary with dealers, models and the city. 

Ravi Bhatia, president of market research firm Jato Dynamics, said, “These incentives are not merely seasonal tactics but rather symptoms of deeper structural issues affecting the automobile sector. The middle class, traditionally the backbone of India's automotive market, is under unprecedented pressure. With real incomes effectively halving over the past decade and with stagnant earnings, their purchasing power has eroded significantly.”

What makes this situation particularly concerning is the confluence of multiple adverse factors -- regulatory-driven price increases from safety and emission standards, inflationary pressures, fluctuating fuel costs, and increased taxation, he added.

These have collectively compressed disposable income precisely when vehicle affordability is declining.

Average weighted price of new vehicles have gone up from ₹8 lakh in 2018 to ₹13 lakh now.

“Income didn't go up that much and adjusted for inflation was even worse. So, savings and discretionary spending gets impacted,” he added.

Price sensitivity has reached critical levels, especially in the entry-level segment, industry watchers felt.

Feature Presentation: Rajesh Alva/Rediff.com