Festive discounts remain high as carmakers rush to clear inventory

Business Standard

2 days ago

Festive discounts on mass-market passenger vehicles (PV) continued to remain high in August, ranging between ₹40,000 to over ₹1 lakh, as carmakers scramble to liquidate inventory ahead of the upcoming launches and avoid heavy discounting during the festive season.
With Rakshabandhan and Ganesh Chaturthi falling during the month, the discounts are almost at a similar level as compared to last year.
In 2024, carmakers had rolled out steep incentives to clear older stock, with average cash discounts and exchange bonuses in the ₹60,000 – ₹1 lakh range on slow-moving models. This year, while the quantum remains high, the spread has widened to popular mass-market hatchbacks and sedans, with offers ranging between ₹40,000 – ₹80,000, while select SUVs and multi-purpose vehicles (MPVs) carry benefits exceeding ₹1 lakh, especially for older models still in stock.
Nearly one-fourth of the annual car sales happen during the festival months in India, and original equipment manufacturers (OEMs) typically raise production to meet demand. Discounts to lure customers at the onset of the festivals is a sign of relatively tepid demand sentiment. PV retail sales declined marginally year-on-year in July, even as month-on-month there was double digit growth in volumes, indicating some revival.
Dealers say higher discounts on premium mass-market models are aimed at countering rising EMI costs and clearing units ahead of upcoming festive launches.
Tata Motors Group CFO P Balaji acknowledged that 'ICE discounts in the market remain elevated', but said the company is tackling the issue by reducing dealer-end inventory ahead of and during the festive season to prevent heavy discounting. 'Post-festive season, we aim to bring stock levels down sharply to protect dealer profitability and avoid panic-driven price cuts,' he said, adding that the focus is on retail sales rather than wholesale market share.
Dealers also say discounting is likely to persist in the run-up to the festive season as companies compete for buyer attention amid a flurry of new launches and the lingering impact of high interest rates on affordability. However, if retail demand picks up during the September–November period, OEMs may taper incentives towards the year-end.
Compared with 2024, the 2025 discount landscape also reflects a sharper segmentation strategy by manufacturers. Last year's broad-based offers often spanned entire portfolios, while this year's benefits are more targeted — focusing on slower-moving trims, previous model-year inventory, and regions with weaker retail momentum. Analysts note that while total discount outlay remains high, carmakers are being more surgical in their approach, balancing sales pushes with profitability concerns.
This month in the compact SUV segment, Hyundai Creta, Kia Seltos, and Maruti Suzuki Grand Vitara are available with combined benefits ranging between ₹45,000 and ₹80,000, depending on variant and location. In the premium hatchback category, Maruti Baleno, Hyundai i20, and Tata Altroz are being retailed with discounts of ₹30,000 to ₹60,000.
The entry-level hatchback and sedan segments are also witnessing aggressive price support. Maruti Alto K10, Renault Kwid, and Hyundai Grand i10 Nios are offering benefits from ₹25,000 to ₹50,000, while compact sedans such as Honda Amaze, Maruti Dzire, and Hyundai Aura are available with ₹35,000 to ₹70,000 in total offers. Mid-size sedans, including Hyundai Verna and Honda City, are seeing discounts climb up to ₹1 lakh on select variants.
Larger SUVs and MPVs, too, are part of the discount wave, albeit with a wider variation. Toyota Innova Crysta and Tata Safari are seeing deals in the ₹50,000 to ₹1.2 lakh range, while Mahindra's Scorpio-N and XUV700 are being pushed with benefits of ₹40,000 to ₹80,000 in certain markets. However, high-demand models with long waiting periods remain largely insulated from heavy discounting.
In the run-up to the festive season, carmakers are looking to clear inventory amid stiff competition. Among compact hatchbacks, Maruti Celerio and Wagon R each are available with discounts ranging between ₹55,000 and ₹60,000, depending on variant and stock levels at dealerships, while the Grand i10 Nios is carrying cash benefits and exchange bonuses totalling around ₹50,000 in certain markets.
In the mid-size hatchback space, Toyota Glanza is being offered with benefits similar to the Baleno's ₹30,000 – ₹40,000 range, while i20 is available with ₹35,000 – ₹45,000 in benefits, including corporate offers.
Small and mid-size SUVs are witnessing even steeper price cuts. Maruti Brezza is available with ₹40,000 – ₹55,000 in benefits, Hyundai's Venue with ₹45,000 – ₹55,000, Tata's Nexon with up to ₹50,000, and Mahindra's XUV300 with schemes worth ₹60,000 – ₹70,000 in some cities. In the larger SUV space, the Hyundai Alcazar is being offered with ₹70,000 – ₹80,000 in discounts, while the Tata Harrier is attracting benefits between ₹75,000 and ₹1 lakh depending on model year and variant.
Even in the sedan segment, where volumes have been softer, deals are enticing. Skoda's Slavia and Volkswagen's Virtus are carrying offers in the ₹55,000 – ₹65,000 range, while City is available with benefits up to ₹75,000 and Verna with discounts of around ₹60,000 –₹65,000, aimed at boosting showroom footfalls ahead of the festive rush.