Cos boost incentives for SUVs, minivans to stimulate demand
Mumbai: Sport utility vehicles (SUVs) and minivans, the two segments with significant sales traction, see a spike in incentives. The minivan segment saw average incentives jump from Rs 33,720 in May this year to Rs 43,727 in June 2023. The SUV segment, too, saw similar incentive increases from Rs 32,296 to Rs 42,215 for the same period.
Body styles such as the micro-car and mini-MPV segment maintained its incentive levels at Rs 38,997 and Rs 17,665, respectively. Hatchbacks and sedans saw a marginal rise for the quarter ended June 2023, according to Jato Dynamics data. During the pandemic, supply was severely constrained, which allowed OEMs to raise prices and operate with negligible discounts.
However, with a build-up of stocks in the pipeline, OEMs are now using incentives as a form of price discrimination to generate demand. While PV sales have recorded the highest-ever volumes of almost a million cars for the April-June quarter, paradoxically, OEMs are also offering big sales promotion incentives on many models, said experts. Incentives can be a combination of cash discounts, exchange or trade-ins and freebies like extended warranty, free insurance.
«This paradoxical situation has emerged from the demand-supply mismatch and the supply constraints in semiconductor components issues,» said Shashank Srivastava, senior ED at the country's largest carmaker, Maruti Suzuki. «While there is growth in incentives on specific models and body styles, we're also beginning to see an increase in average weighted incentive for both luxury and mass production models. The change in incentives happens at a time when the industry inventory is swelling to almost pre-pandemic levels according to some dealers,» said Ravi Bhatia, president,
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