Opinion
Mint Quick Edit Auto sales: The festive season will be crucial
Summary
- It’s raining discounts in the car market—the latest to offer them being Tata Motors—as excessive rainfall is said to have led customers to postpone purchases. The upcoming festive season will be crucial for a demand revival. Otherwise, the industry may have a bigger problem to reckon with.
With sales in the slow lane, it’s little surprise that special offers have been raining in India’s car market. The latest to offer price-offs is Tata Motors, which has slashed prices on some of its popular vehicles by up to ₹2 lakh. Other manufacturers and even financiers have laid out schemes to draw customers.
Also read: Why car sales have hit a festive speed-breaker
Indeed, dealers are reportedly stuck with inventory worth almost ₹80,000 crore. This poses risks to their profitability as well of the broader industry. Some players have pinned the current lull in car demand on excessive rainfall, which may have led prospective car buyers to postpone purchases.
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With parts of the country still being lashed by abnormally high rains, that sounds like a plausible factor, especially if waterlogged streets in some parts of urban India are acting as a dampener of enthusiasm.
The real test, of course, will be after the monsoon, as India’s annual festive season begins. While luxury vehicle sales have been zooming along regardless of rains, thanks to relatively inelastic demand at the upper end of the market, mass-market car-makers are hopeful that the broader slump is transitory.
Also read: EVs fare better in the resale market. Just don't compare them to ICE cousins.
Discount pricing is not sustainable beyond a point.
