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Discounts, impending price hike increases footfall at car showrooms

Source : BUSINESS_STANDARD
Last Updated: Mon, Dec 10, 2012 03:53 hrs

pDecember is that time of the year when carmakers offer discounts galore to clear inventories And this year it is coupled with announcements of price hikes come January Will the dual effect of discounts and impending price rises bring the customer back to the showroomsppWell dealers say footfall and enquiries overall have increased by around 20-25 per cent compared to last month but are not expecting a bonanza month in terms of salesppCarmakers are offering December discounts in the range of Rs 15000 to Rs 15 lakh in the form of cash benefits exchange offers accessories as well as extended warranty Hyundai has rolled out December Delight where one can save upto Rs 50000Tata Motors is offering the Ultimate December Offer across models with savings in the range of Rs 25000 to Rs 15 lakh Ford recently had a midnight sale 8 am to midnight with discounts upto Rs 81000pp"Traditionally the months of November and December are low months with the festivals over People usually wait for new models and also for a new year registration for their car to ensure higher re-sale values One encouragement for them to come back to showrooms are discounts" says P Balendran vice president corporate affairs General Motors India He added that while currency fluctuations and rising input costs have put margins of carmakers under pressure no one could raise prices during the festive season "Also since November-December are low months no one would wish to raise prices now So all price hikes are lined up for January" he explainedppGeneral Motors would be raising prices by 1-3 per cent from January Balendran claimed that footfalls have already increased at the showrooms "The actual impact on sales can be ascertained after some time but footfalls have already picked up" he saidppAll major carmakers have announced price rises come January Maruti is all set to raise prices by upto Rs 20000 from next month While Hyundai is yet to announce a price rise dealers say that there might be an increase of 15 to 2 per cent across models Mahindra & Mahindra which has started advertising its December discount offers to pull customers is also likely to raise prices by upto 3 per cent say dealers In line is Toyota Kirloskar Motors which is mulling price increases by 1-15 per cent across modelsppA senior Maruti Suzuki official said "The price rise is necessary as there has been significant pressure on the margins due to currency fluctuations" As an Angel Broking report highlighted "We expect the price increase to slightly offset the negative impact of foreign exchange movement on the operating margins of the company"ppA city-based Toyota dealer informed that come January Fortuner prices would be increased by Rs 50000 while Innova prices can be raised by around Rs 30000 Even prices of Etios sedan and Liva hatch can rise by Rs 15000ppYaresh Kothari automobile analyst with Angel Broking said "The quantum of hikes by most carmakers is not clear yet As for Maruti it has said it would raise prices by upto Rs 20000 and considering that the average price across its models is around Rs 4 lakh the rise is as steep as 4-5 per cent But Rs 20000 rise can only happen in case of more expensive models So the uncertainty is going to bring back customers to the showrooms"p


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