As the government-run Indian Oil Corporation announced a Rs. 6.38 hike (excluding taxes) in petrol prices, auto makers began fretting about the sales of petrol-run models, which are already losing out to diesel variants. While the demand for the latter has steadily increased in the domestic market due to higher fuel efficiency, the demand for the former has only lessened.
Therefore, car makers operating in India felt the need to raise discounts offered on petrol vehicles in a bid to trigger higher sales. The biggest car manufacturer of the country, Maruti Suzuki, is now offering a discount of Rs. 30,000 on its best selling Alto entry level hatchback. In the last one year, sales of the car have fallen from 25,000 to 28,000 units to 20,000 and 22,000 units, which are expected to go down even further due to the lack of a diesel variant. The company also provides rebate of around Rs. 15,000 to 20,000 on other petrol models it offers.
Mayank Pareek, Managing Executive Officer - Marketing and Sales, Maruti Suzuki India, said, "Sales of entry level cars are getting affected in recent months due to very high fuel prices. Sales of Alto is falling and to boost sales of the car, we will offer discounts of Rs 30,000 till month-end."
Pareek also shed light on the condition of manufacturers regarding diesel cars. He said, "The hike this time is more than all the hikes last year in three instalments. The demand for diesel cars, which is already high, will continue to rise. Ironically, none of us has extra cars to deliver as we are all operating at peak capacities."
India’s second largest car maker, Hyundai Motors India Ltd. (HMIL) is now giving a flat discount of Rs. 3,000 on all petrol models it offers in the country. It has commenced a new initiative called ‘Petrol Lock Scheme’ that is applicable on petrol variants of cars like Eon, Santro, i10, i20, Accent and Verna. This unique programme is aimed at protecting the buyers from the adverse effects of the rise in petrol price for a period of 7 months.
Tata Motors has gone ahead with massive discounts (from Rs. 10,000 to 50,000) on the petrol variants of the models it offers under the Indigo and Indica series. The manufacturer already provides various discounts for its Nano hatchback; a rebate of Rs. 10,000 will be applicable on the model in May 2012.
Ford India’s Executive Director – Marketing, Sales and Service, Nigel Wark, stated that a hike was expected, but not of such magnitude. He said that this will further stunt the growth rate of the automobile sector of India
