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Automakers entice customers with cash discounts, financial packages as COVID-19 lockdown eases

Automakers entice customers with cash discounts, financial packages as COVID-19 lockdown eases

Automakers entice customers with cash discounts, financial packages as COVID-19 lockdown eases
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By Alisha Sachdev  Jun 11, 2020 6:22:58 AM IST (Updated)

While automakers are offering discounts to draw buyers, the discounts in June are by-and-large lower than what was being offered pre-COVID.  

A downcycle is usually the best time to make big-ticket purchases such as a car. Many office goers are thinking of commuting to the office in their own vehicles given the need for social distancing amid the coronavirus pandemic.

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Is this a good time to buy?
While automakers are offering discounts to draw buyers, the offers in June are by-and-large lower than what was being offered pre-COVID-19.
However, industry sources suggest that automobile companies will likely increase these discounts if sales fail to pick up by the end of the month. Sales in May were down 84 percent year-on-year.
Reducing the cost of acquisition
Auto firms recognise that many customers keen to own a vehicle are right now grappling with a cash crunch. To help potential buyers overcome the financial hurdle, the companies are coming up with innovative financing options.
Mahindra & Mahindra, Maruti Suzuki, Tata Motors, Volkswagen and other carmakers are offering "buy now, pay later" options, longer repayment tenures and the flexibility to structure loans according to their personal needs.
Skoda, Renault, Datsun among others are also offering EMI holidays, 100 percent finance and special interest rates, according to data compiled by JATO Dynamics, a global data insights and consulting company.
The benefits extended by OEMs include cash and exchange benefits, and also ownership value-added services which include a warranty, car insurance, free accessories etc.
Maruti Suzuki, for instance, is offering benefits from Rs 30,000 to Rs 45,000 on models such as Alto 800, Swift, WagonR, Dzire.
Hyundai has discounts on its i20 model and has hiked discount on the i10 model; but there are no discounts on the newly launched Creta or Aura.
Toyota is currently offering benefits worth Rs 20,000 on Innova.
Discounts on Honda Cars' Amaze are at same the levels as they were pre-COVID-19 pandemic.
A comparison with pre-COVID-19 discounts:
Top 20 Models (BS-6) ~MS%Pre Lockdown Offers - March '20Post Lockdown Offers - June '20Variation%
ALTO 8007.2%45,00035,000-28.6%
WAGON R6.5%35,00030,000-16.7%
SELTOS5.5%No OffersNo Offers
VENUE3.5%No OffersNo Offers
VITARA BREZZA3.4%No OffersNo Offers
ERTIGA3.1%No OffersNo Offers
CRETA2.2%No OffersNo Offers
AURA2.0%No OffersNo Offers
GRAND I10 NIOS2.0%20,00020,0000.0%
BOLERO POWER+1.9%6,000
(Source: JATO Dynamics)
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