Car, bike dealers to offer big discounts this festive season

Car, truck and two-wheeler makers are likely to offer heavy discounts and other freebies to customers in the upcoming festive season, as the automotive sector looks for desperate measures to prop up sales. "The auto industry, as a whole, has not been doing too well. As a strategy, companies are bound to go for more aggressive customer acquisition, Pawan Goenka, President Automotive and former President of industry body SIAM told India Today on Friday.
" There will also be cost controls at all levels. The automotive industry has been battling falling sales for eight consecutive months in cars and 17 straight months for heavy vehicles, leading to these companies resorting to laying off staff. Even sales of two-wheelers, that so far have remained insulated, have slowed down over the last two months. Picture for representation. Normally, festive season goodies on offer from auto makers range from cash discounts, free insurance loyalty exchange bonus and accessories. Last year, car makers, including Honda Siel Cars, Tata Motors, Maruti Suzuki and Ford India reportedly offered discounts of around Rs.60,000 on their vehicles to capitalise on the festive season and revive sluggish demand.
 With the festival of Onam approaching in Kerala, and the Ganpati festival in Maharashtra starting from September 9, car makers would look to boost sales through discounts. "There would definitely be discounts ranging from mid to heavy, since the industry is going through a slowdown, says Rakesh Batra, National Leader, Automotive Practice, EY (earlier Ernst & Young). "But that also depends on the level of inventory in products. Products with high inventory will see higher discounts, while new ones like the Ford Ecosport or products with long waiting list like the Honda Amaze, will not see such big discounts, he added. There would also be discounts at the dealer level. However, the escalating price of inputs in view of the falling rupee (for imported parts) can be a dampener," Batra said. Meanwhile, auto companies say there would be manpower 'adjustments' in tune with market realities.
"We continue to align a dynamic mix of permanent and temporary workers, including trainees and there tend to be the cyclical changes based on adjustments of temporary resources," a Tata Motors spokesperson said. "Additionally, we continue to look at our manpower planning in a prudent fashion to be in sync with the market environment, avoiding a blind replacement of superannuating employees. This has enabled a better alignment of our people resources to current business requirements. Tata Motors has cut its workforce by 21 per cent at its Pantnagar plant in Uttarakhand, where it employed 5,838 people, even as its passenger vehicle sales in the domestic market fell 56 per cent to 10,824 units in July, from 26,240 units a year ago. M&M had laid off 500 temporary staff at its Chakan plant in Maharashtra. "While we do not comment on specifics of our manpower, we would like to reiterate that there has not been any dramatic change and reduction in our manpower in the Pantnagar factory (as suggested in some media reports).
We had been doing well till two to three months back," said Goenka. "But now, like every other auto company, we need to cut costs. Some companies go in for plant closures. Asked if the company would halt launch of new models in the wake of sluggish demand, Goenka said, "Product launch decisions are decided separately, and are long term plans. They do not depend on vagaries in the economy."