As part of Tata Motors’ festive season offerings, the company has announced a significant price cuts of up to ₹2 lakhs on select SUV models in order to boost demand in the sluggish passenger vehicle (PV) market.
Share market reacted negatively to this news, as its stocks crashed after this announcement was made.
SUV Prices Slashed to Stimulate Sales
As per the Federation of Automobile Dealers Associations (FADA), there has been 3.46% MoM and 4.53% YoY decline in passenger vehicle sales in August and this move intends to counter the same.
It shall be on all the SUV variants like the Harrier, Safari, and Nexon that the discounts shall be applicable, with the discounts depending on the location as well as dealership.
Not just discounts, but there are additional price cuts that customers can avail from the exchange bonuses, cash offers, as well as value-adds such as extended warranties and free accessories.
These offers shall continue to be available throughout the month of October, which would align with major festivals like Diwali so that the consumer purchases are encouraged during the critical holiday period.
Alarming Inventory Levels and Challenges Impacting Festive Season Sales Raised by FADA
The president of FADA, Manish Singhania said that “Inventory levels have reached alarming highs, with stock days now stretching to 70-75 days. Inventory across dealerships totals 780,000 vehicles, valued at ₹77,800 crores. Despite the slowdown, original equipment manufacturers of passenger vehicles continue to increase dispatches to dealers on a m-o-m basis, further exacerbating the issue”.
As per the FADA statement, there are several other challenges that are coming forward in the way of festive season. The statement read that “India experienced 16% above-normal rainfall in August, with additional heavy rainfall forecasted for September, according to the India Meteorological Department (IMD). This excessive rain threatens crops nearing harvest, particularly those planted in late June. Poor agricultural output could directly impact rural sales, reducing purchasing power in key regions.”
In addition to this, giving a blow to the same is the Shraddh period in September, which is deemed to be an inauspicious time for purchases. This could further lead to a temporary sales slowdown, putting extra pressure on dealers who are already managing high inventories.
