To lure customers in a free-for-all marketing bout car companies, with their dealers, are offering cash discounts, free insurance, exchange bonus, low rate of interest, lucky draws etc. Why are they rushing in to entice customers when sales are booming. Car sales in the country zipped 32 per cent during April to November 2010 at 12.67 lakh when compared with the same period last year.
The main reason why buyers are pampered is that in the month of December they normally shy away from buying a new car as it becomes one year old in the next month. This inertia comes from a traditional mindset that in the resale market cars lose value with the addition of every year to the year of purchase. So, people prefer to buy a new car in January, rather than in December. To overcome this seasonal drop car makers in the last few years have been offering lots of sops in December.
Just sample the following. Maruti Suzuki is offering ‘savings’ ranging from Rs 20,000 (Alto K10) to Rs 60,000 (in Estillo and A-star) on purchase of a new car in December. In all, it is offering varied discounts in 9 of its models starting from base level Alto to its sedan SX4. As a part of the deal, the company is also offering exchange bonus up to Rs 25,000. Not to be outdone, Hyundai India, as a part of December sales promotion, is offering many freebies like free insurance, cash discount, exchange bonus etc for its popular small cars Santro Xing and new i10.
The company claims that according to its schemes a car buyer can save up to Rs 33,000 on Santro and Rs 40,000 new i10. The company also has attractive schemes running for Verna, Accent, i20 and Sonata. General Motors has slashed prices of Chevy Spark from Rs 3.22 lakh to Rs 2.73 lakh and for Beat from 3.53 lakh to 3.32 lakh.
The company in its ad is also comparing the price of rival brands to drive home the point that its cars are much cheaper. Tata Motors has resorted to the concept of ‘lucky draw’ as its ‘Ultimate December Offer.’ The company is asking potential buyers to participate in an online quiz and slogan contest for an opportunity to get a free car or a free gift cheque of up to Rs 1 lakh every day. The contest is valid for the company’s MUVs like Tata Safari, Tata Sumo and cars like Indica, Indigo, Manza ,etc.
Then there are others like Ford India offering car loans at only 8 per cent rate of interest for Ford Endeavour and its small car Ford Figo. On Ford Fiesta the company promises to knock off up to Rs 71,000 from the price as a part of its ‘December Dhamaal’ promotion. Interestingly, leading companies, through their ads, have also informed that prices are going to be revised upward from January. Surely, by all counts car sellers have turned ‘Santa’ in the last month of the year for their customers.