Discounts on car models will stay: Maruti

New Delhi:  With the automobile market reeling under a slump, the country’s largest carmaker Maruti Suzuki India expects to continue offering discounts in order to boost its sales. “We offered a discount of Rs 17,500 on an average across models in the fourth quarter (ended March 31). Discounts are going to remain unless the market condition improves,” Maruti Suzuki India chief financial officer Ajay Seth said on a conference call.

 

The market has not picked up even after excise duty on small cars was reduced to eight  per cent from 12 per cent earlier. For mid-sized cars, the levy has come down to 20 per cent from 24 per cent, while large cars attract duty of 24 per cent compared with 27 per cent earlier. “We are getting inq-uiries. However, the inquiries are not getting converted into sales. Our hope is that when economy recovers these inquiries should get converted into sales,” Mr Seth said. 

 

The excise duty cut, announced in the interim budget in February, backfired because the company had to compensate dealers to the extent of Rs143 crore in the January-March quarter. 

In February, Maruti cut vehicle prices by between Rs8,502 and Rs30,984 across models after the excise duty reduction was announced.  Asked if Maruti would follow Honda Cars India and Mahindra in increasing prices this month, Mr Seth said: “Where is the question of increasing the prices in this weak market? Unless market sentiment changes, we don’t have any plan for a price increase.” The firmscrapped a proposed price hike from January as the market remains weak despite steps taken by the government.