To check and curb the trend of dipping sales of cars due to rising fuel prices and high interest rates, automakers plan to set up better packaged discounts from June, 2011. The retail sales of cars witnessed a 10% fall in May, 2011 as compared to the sales in the previous month.
“Discounts serve best when times are hard. After two months of slower sales, we have been informed that discounts would go up in June with specific target to increase sales and reduce the inventories on certain models,” commented a Maruti dealer in India. Giving attractive discounts echoes the strategy adopted in the pre auto-boom period of 2009-2010 which paid rich dividends.
Many car companies are lining up cash benefits of up to Rs. 60,000 per car to attract the buyers. To boost the sales their cars, Maruti, Hyundai, Fiat, Ford, Tata and General Motors were offering higher discounts in May, 2011. GM was also offering a loyalty bonus of Rs. 10,000 on its exchange scheme. The auto dealers too are coming forth with attractive schemes to make the buying of vehicles more attractive. Among luxury car makers Audi and Mercedes-Benz are enticing customers with 0% interest rates on certain car models, while Porsche is offering loans at 2.5% interest rate for its sports model Cayman and 911.