Automobile Industry Slowdown: Record Discounts on Cars, Up to ₹1 Lakh on SUVs and ₹50,000 on Small Cars

Amid a slowdown in the automobile industry, cars are now being offered with the highest-ever discounts. According to automobile dealers, following a decline in passenger vehicle sales in November, discounts on cars have reached record levels in December.

In October, during the festive season, car sales were expected to rise. However, post-festive season, retail car sales in November dropped by approximately 14% year-on-year. This has pushed unsold inventory to a record level of 65 days. The excitement during the festive season has cooled down due to weak buyer sentiment, leading to a significant setback for auto dealers. With declining sales, unsold car stock has been piling up in showrooms and dealer warehouses. To clear this rising inventory, auto companies and dealers are offering massive discounts on vehicles.

Currently, discounts of up to ₹50,000 are being offered on small cars, while SUVs are available with discounts of up to ₹1 lakh. The highest discounts, reaching up to ₹3.7 lakh, are being offered on Tata’s Safari and Harrier models. Free insurance and maintenance packages are also being provided to attract customers.

Experts suggest this situation has become a matter of concern for the automobile industry. While the initial months of 2024 saw improvements in passenger vehicle sales, the sharp decline in November has created new challenges for the industry. In October, retail car sales stood at 4.83 lakh units, which fell to 3.22 lakh units in November—a month-on-month decline of over 33%.

Additionally, economic uncertainties and rising interest rates are impacting car sales. Customers’ purchasing power has reduced, leading many to postpone their car-buying decisions. Dealers and companies fear that if sales continue to lag behind production, unsold inventory will keep growing. An increase in old car inventory could also affect the sales of new models.

However, some customers are taking advantage of these discounts and offers to purchase new vehicles. Yet, even with these offers, sales have not reached the expected levels. This crisis in the auto industry indicates that companies and dealers will need to adopt new strategies. If sales do not improve, this issue could pose an even greater challenge for the industry.