As per the data compiled by JATO, the average discount level has come down by more than 50 per cent since 2019 and 28 out of 88 models sold in India are not attracting any discount this festive season.
see photosThe problem of semiconductor shortage has severely affected car sales.
Car buyers usually keep an eye on the festive season period as it is the most auspicious time of the year for any purchase. Even automakers try to capitalize on the demand through attractive discounts across their model range. However, this year buyers may be a bit disappointed. As per the data compiled by JATO, the average discount level has come down by more than 50 per cent since 2019 and 28 out of 88 models sold in India are not attracting any discount this festive season.
Read also: How does a semiconductor shortage affect the auto industry?
The impact of the drop in discounts is already visible on the sales of the festive season
Now to give you a perspective, the average discount on SUVs has come down from ₹47,000 to ₹15,000 while the discount on small cars has come down from ₹43,600 to ₹13,000. And to give you a further understanding, last year (2020), 21 out of 102 models were not on discount and in 2019, 23 out of 106 models were not on any discount. The drop in discounts has already shown an impact on festive season sales as Navratri sales are not very strong and reassuring and even Dhanteras and Diwali sales are likely to be affected. That said, the decline in sales isn’t due to low demand or negative customer sentiment. This time around, automakers have adopted a supply-pull approach by slashing prices or offering higher discounts due to severe crisis in the global supply chain.
Read also: New semiconductor plants will end global auto chip shortage next year: Musk
Some high-volume models have long waiting periods
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Primarily, the supply chain disruptions are attributed to semiconductor shortages that automakers across the world are dealing with. Both domestic and foreign automakers are bearing the brunt of chip shortages and are seeing major delays in production as cars become advanced and technology-laden these days. In fact, according to our dealer sources, some high-volume models are under longer waiting periods of six months or more. Also, a customer is not assured of on-time delivery during the festive season period, even if he has booked a car a few months back. Automakers also see the festive season as a good opportunity to recover volume losses due to COVID-19, but are unlikely to meet that target this year as well.
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