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Why Are There So Many Discounts This Month? We Explain

unsold car investory india 60,000 crores

The month of July has brought a lot of rain in the country. What it has also brought are the showers of discounts from major automakers in the country. Now if you are one of the few people who are curious to know why there are so many discounts being offered, well, then you have come to the right place. There is not one but a few different reasons behind these heavy discounts on popular cars, so without any further delay here’s the explanation.

Why Are There So Many Discounts This Month? We Explain

Why are there so many discounts?

Unsold car inventory. The Indian car industry now has Rs. 60,000 crores worth unsold cars lying in stockyards across the country, and the number is just rising. No sales means big pressure on both dealers and car makers to sell stock, and that means discounts!

Of the several factors that have contributed to the current discounts being offered on cars, one severe reason is the delayed monsoon. In the last few months, India noted extremely high temperatures and heatwaves which led to lower foot traffic in showrooms.

The extreme temperatures, now followed by heavy rains, have discouraged a lot of potential buyers from visiting dealerships. This has significantly impacted sales. Additionally, the general elections have also diverted public attention and spending.

Why Are There So Many Discounts This Month? We Explain

Tightened Credit Availability

Over the last few months, banks have also become more cautious in their lending practices. They are currently favoring customers with high credit scores. Hence this tightened credit availability has made it harder for many potential buyers to secure loans.

Now the direct impact of this has resulted in reduced overall demand for new vehicles. Additionally, this reluctance to lend, coupled with high-interest rates, has deterred many consumers from purchasing new cars.

Overstocking and Inventory Issues

Why Are There So Many Discounts This Month? We Explain

Coming to the most important reason behind these discounts, the Federation of Automobile Dealers Association (FADA) has reported that there is an unsold inventory of 6 to 6.5 lakh units. This total inventory has been valued at around Rs 60,000 crores. This surplus has been accumulating over the past few months, stated the federation.

In just the last two months, an increase of 77,000 units has been noted. Also, it was reported that in May 2024, dealer inventory stood at 4 lakh cars worth Rs 44,000 crores. The industry is currently experiencing its highest inventory levels in history, with stock levels ranging from 62 to 67 days.

Disparity Between Wholesale and Retail Sales

Why Are There So Many Discounts This Month? We Explain

What has also been noted is that despite the efforts from automakers to stimulate demand through hefty discounts and promotional offers, the overall sales in the country have remained sluggish.

In June 2024, total wholesale dispatches grew by 4% to 341,000 units. However, the actual vehicle registrations stood at 281,600 units. This has highlighted the significant gap between supply and market demand.

Discounts on cars

There are a number of models from almost all the manufacturers in the country that are being offered with hefty discounts. Of these, a few major ones from Maruti Suzuki and Mahindra automotive along with other automakers. On some cars like the Jimny, XUV700, and MG Gloster the discounts exceed Rs 2 lakh. Also following is the list of 7 more cars with discounts upwards of Rs 2 lakh.

Maruti Suzuki Jimny

Why Are There So Many Discounts This Month? We Explain

The Maruti Suzuki Jimny top-spec Alpha AT variant is being offered with a discount of up to Rs 3.3 lakh. This includes a combination of cash discounts, exchange bonuses, and corporate offers. There are also discounts of Rs 2.75 lakh on the Zeta AT variant as well.

Mahindra XUV700

Why Are There So Many Discounts This Month? We Explain
XUV700 Deep Forest

Mahindra XUV700 is now also being offered with discounts up to Rs 2.2 lakh. This is not necessarily a discount, but the company has actually slashed the pricing of the XUV700.

MG Gloster

Why Are There So Many Discounts This Month? We Explain
MG Gloster

The British motoring brand MG Motor India is also offering heavy discounts on its top-of-the-line Gloster SUV. The Gloster is currently being offered with a discount of up to Rs 2 lakh. This discount is on the Deep Golden color of this SUV and there is also a Rs 1 lakh exchange bonus as well.

Citroen C5 Aircross

Why Are There So Many Discounts This Month? We Explain

French carmaker Citroen is also offering this flagship C5 Aircross with total discount benefits of up to Rs 3.5 lakh.

Skoda Kushaq

Why Are There So Many Discounts This Month? We Explain
Skoda Kushaq Onyx AT

The compact SUV Kushaq from Skoda is also being offered with a massive Rs 2.5 lakh discount. The company is also offering a 3-year maintenance package and a 5-year extended warranty.

Volkswagen Taigun

Why Are There So Many Discounts This Month? We Explain

Volkswagen is offering the Taigun with discounts up to Rs 2.9 lakh. These benefits include Rs 1.78 lakh cash discounts and Rs 73,000 worth of accessories. There is also a Rs 40,000 exchange bonus as well.

Volkswagen Tiguan

Why Are There So Many Discounts This Month? We Explain
Vw Tiguan

Apart from the Taigun, Volkswagen is also offering its most expensive SUV Tiguan with a massive Rs 3.4 lakh discount. This SUV costs Rs 35.17 lakh (ex-showroom).

Skoda Kodiaq

Why Are There So Many Discounts This Month? We Explain

Like Volkswagen, Skoda is also offering its top-of-the-line Kodiaq with discounts up to Rs 2.5 lakh. These include various benefits. Currently, the Kodiaq starts at Rs 38.50 lakh.

Citroen C3 Aircross

Why Are There So Many Discounts This Month? We Explain
C3 Aircross Dhoni Edition

The Citroen C3 Aircross is being offered with benefits up to Rs 2 lakh. The company has significantly reduced the price for the C3 Aircross Plus model. It now starts at Rs 8.99 lakh.

Mahindra XUV300 (pre-facelift) and MG ZS EV

Why Are There So Many Discounts This Month? We Explain

Both the Mahindra XUV300 previous generation and the MG ZS EV are being offered with discounts up to Rs 1.5 lakh.

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