Data compiled by Jato Dynamics, a supplier of auto business intelligence, showed that the average discount level has shrunk by more than 50% since 2019, with SUV discounts falling from Rs 47,000 to Rs 15,000, while small car discounts from Rs 43,600. 13,000 has come down to Rs. There is a supply problem in the market due to the shortage of semiconductors.
As a result, the customers are not getting the desired car and neither do they want the cars they get.
Jato President Ravi Bhatia Said, ‘Navratri retail is not up to expectations. Despite some plans, entry-level cars are not selling with customers staying away for economic reasons. There is demand in the higher sections but there is also a shortage of vehicles. There are long queues and excitement for new launches, but lack of supply means there is less conversion of sales. ”
Part of the problem is certainly the shift towards SUVs already taking place. Icra Group Head & VP (Corporate Rating) Shamsher Dewan “Inventory levels are slim due to chip shortage and shift towards mid-sized hatchbacks and compact SUVs,” it said.
Car dealers say entry-level cars like two-wheelers have also seen a decline in demand as discounts are cut and prices go up. M&M Dealers Nikunj Sanghi“The demand for entry-level cars in some markets is 30% lower than in 2019,” said JS4Wheel Motor Managing Director.
Car prices have increased with companies taking many markups citing increase in input costs, including steel. And with discounts, the tags are not attractive for two-wheeler upgraders.
Toyota Dealership Analyst Toyota Deputy MD CS Vigneshwar Said, “There are profitability issues for manufacturers because of raw material prices and with low production numbers, there is no need for discounts. But the lack of discounts is affecting the trigger to bring customers to the showrooms, hence Retail is also being impacted. Hence, more customers are probably jumping straight to SUVs and premium hatchbacks in cars above the entry-level Alto or WagonR.
Car dealers say higher fuel prices are also playing a bad game, especially with the segment which is just entering the car market and is most sensitive to discounts.
“The entry-level car market is behaving like a two-wheeler, where demand is 30% lower as compared to 2019 and inventory is at a 12-16 week high,” said Sanghi, who has a Hero MotoCorp dealership in Delhi.
.