- 30 Sep 2024
- ICICI Securities
AUTO COMPANIES INCREASES DISCOUNT, TAKES PRICE CUTS
News: As per media sources, Auto companies are increasing discounts and cutting prices in response to a hopeful revival in demand in the upcoming festive season. OEMs like Maruti Suzuki, M&M, Hyundai and many more have taken a price cut of 2% - 9% and have also improved their incentives including Tata motors.
Views: As per VAHAN data retail PV sales in September 2024 (till 28th of the month) totalled to 2.77 lakh units, compared to 3.09 lakh units in the month of August 2024. After seeing a subdued start of the festive season and MoM falling PV sales, most dealers are still holding high inventory of 75-90 days. Therefore, OEMs are ramping up discounts to entice potential buyers who may still be undecided about the timing of purchase. Rising discounts will have a negative impact on the margin profile at OEM’s however rise in retails and consequent decline in dealer inventory shall support wholesale volume growth going forward.
Impact: Neutral