Luxe cars selling at huge discounts, Auto News, ET Auto

<p>The attractive schemes come on back of a retail sales decline by most carmakers in November, according to data shared by the Federation of Automobile Dealers Associations on Monday.</p>
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Mercedes-Benz, BMW and Audi are among luxury carmakers seeking to entice potential buyers with five-year-high price discounts and other incentives in a desperate attempt to exhaust inventory. Luxury carswhich make up only 2% of the broader passenger vehicle market, are expected to close 2024 at 50,000 units, growing 5%, in the slowest pace in three years.

For instance, one can buy the base version of Audi A4 sedan priced at INR 46 lakh (ex-showroom) at a flat discount of INR 7 lakh. The discount can increase by another INR 2-INR 3 lakh depending on how well one negotiates with a dealer. BMW’s X5 SUV is available at a benefit of INR 8-INR 10 lakh. The company’s iX electric SUV, which is priced at INR 1.39 crore, can be bought at a markdown of INR 10-INR 15 lakh depending on dealer stocks.

The trend is also prompting first-time buyers to get into the luxury segment. Last week, Neela Gupta (name changed), a Gurugram-based businesswoman, whose first preference was the top-end model of Mahindra’s Scorpio N SUV at a dealership price of INR 28.86 lakh drove home the A4 at an on-road price of INR 37 lakh.

Audi, which has now slipped to the fourth position in retail sales in the luxury segment-losing the third spot to Tata Motors-owned Jaguar Land Rover India-is offering discounts on most of its models. “Select Audi models are available with attractive benefits, reflecting our strategic approach to enhance customer engagement and celebrate milestones, including the sale of 100,000 cars in India,” a spokesperson for Audi India said in an email response.

Santosh Iyer, managing director at Mercedes-Benz India conceded that even as the level of enquiries are steady, the conversion time-particularly for models that are older in the lifecycle-has doubled to four weeks from two weeks a year and half ago. “One last saw this kind of discounting trend pre-Covid in 2019,” noted Iyer. However, Mercedes finds itself more resilient compared to others. “The direct-to-customer model has helped us to control stocks and keep a check on discounts,” said Iyer.

Depending on the make, brand, and dealer stock in a city, a luxury car customer can currently avail benefits ranging from INR 10 lakh to as much as INR 15 lakh, equivalent to 10-20% of the average selling price, according to multiple dealers, who declined to be named.

The attractive schemes come on back of a retail sales decline by most carmakers in November, according to data shared by the Federation of Automobile Dealers Associations on Monday.

Mercedes-Benz, which leads the luxury car segment, was a notable exception. Its retail sales advanced by a modest 1.2% year-on-year to 1,248 last month. Iyer expects Mercedes to end 2024 with a high double digit growth. He is confident that the luxury car market will make a strong rebound next year. “New and facelifted models will be driving our growth in the calendar year 2025. In addition, we will be introducing some special ‘CBU (completely built unit) models’ which will be brand shapers,” he added.

Others share his optimism and have announced a price hike of 2-3% from January.

“We remain optimistic about the sector’s potential,” said Rajan Amba, MD, JLR India. He said the Range Rover and Range Rover Sport SUV models drove 40% growth in the first half, building on the 80% growth achieved last year. “Notably, we’ve maintained a healthy order bank, eliminating the need for discounts,” said Amba.

A spokesperson for BMW India said the fundamentals of the Indian economy are sturdy and consumer confidence in the luxury segment is on the rise.

“The festive season has been good, and we are confident of closing the year on a high note with impressive growth,” the spokesperson said.