The festive season is here and discounts have started raining thick and fast as corporates look to woo customers! The auto sector which is witnessing one of the biggest slumps ever has lined up hefty discounts and other offers to clinch sales.

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India's largest carmaker Maruti Suzuki is offering discounts and other benefits in the range of Rs 40,000 to Rs 1,01,200 on its popular models. Other companies like Honda, Nissan, Hyundai and Renault are also offering competitive benefits to beat the slowdown blues.

Delhi-based traders body Confederation of All India Traders (CAIT) National Secretary General Praveen Khandelwal said the discount level this year is more compared to last year due to high inventory pile-up in the wake of slowdown.

"Last year, the discounts averaged from 5 to 10 per cent. This year, those are in the range of 10-30 per cent. For the stocks lying unsold for the last one year, the discount is more than 30 per cent. Online retailers are giving discounts upto 80 per cent to corner more market share," Khandelwal said.

The wholesale price index (WPI), which reflects producers` pricing power has been consistently low and economists see it further dropping in the face of unsold stock and sub-optimal capacity utilisation. The lower capacity utilisation in manufacturing sector is one of the main reasons private investment has remained subdued. The WPI has been showing downward trend and it was lowest in August in the last 25 months.

However, most retailers have complained of squeezed margins due to deep discounts, which are necessitated to maintain cash flow even if it means loss.

"The market was gung-ho for a long time as the consumption was only soaring. Keeping with that the manufacturers created huge inventory, which has got stuck all of a sudden due to the slowdown. Now the best way to clear the inventory is to get the goods going at deep discounts," said brand strategist Harish Bijoor.