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Business News/ Industry / Manufacturing/  Auto makers line up new models, retain discounts to tap upturn
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Auto makers line up new models, retain discounts to tap upturn

A dozen new cars, including variants of existing models, are set for launch over the next two months

The Maruti Suzuki Ciaz is expected to be priced in the range of Rs7.25-10 lakh. Premium
The Maruti Suzuki Ciaz is expected to be priced in the range of Rs7.25-10 lakh.

Mumbai: Bangalore-based IT professional Nikesh Gupta has finally decided to buy a second car for the family during the Navaratras—considered an auspicious time for big-ticket purchases—next month after putting it off for two years.

Gupta will buy either Maruti Suzuki India Ltd’s new mid-range sedan, Ciaz, which India’s largest car maker will launch in October, or Ford India Pvt. Ltd’s sport utility vehicle (SUV) Ecosport that hit the roads last year.

“Somehow I am a lot more confident in buying a new car this time around," says Gupta, 38, who has received a bigger salary hike this year.

As the economy turns around after two successive years of sub-5% growth and consumer sentiment improves, auto makers are lining up new launches to attract buyers like Gupta who are ready to make the purchases they were postponing during the downturn.

The Maruti Suzuki Ciaz is expected to be priced in the range of 7.25-10 lakh, and will compete with Honda City, Hyundai Verna and Volkswagen Vento. The local arm of Japan’s Suzuki Motor Corp. also plans to introduce a refreshed version of its compact car, Swift, next month.

The Avventura, a crossover style hatchback based on the small car Punto, from Fiat Group Automobiles India Pvt. Ltd, will be yet another prominent launch this season.

Estimated to be priced in the range of 5-7 lakh, it will be the first new model to be introduced by Fiat in India in five years. The model is likely to go on sale before Diwali, which falls this year on 23 October.

Car makers are seeking to tap an upturn in consumer sentiment after the assumption of power by a stable government led by the Bharatiya Janata Party post the April-May general election. Economic growth was 5.7% in the June quarter—the fastest pace in two-and-a-half-years—and fuel prices have been coming down in step with a drop in international crude oil prices, although other indicators like factory output have been volatile and interest rates are still high. A 28% rise in BSE’s benchmark Sensex in the year to date has added to the feel-good factor.

“Compared to the last two years, this festive season is likely to be much better. We have already seen signs during festivals like Ganesh Chaturthi (August) and Onam (September). Car sales expanded 15% in August over a year ago and we expect the momentum to continue for the next two months," said Surjit Singh Arora, an analyst at securities firm Prabhudas Lilladher Pvt. Ltd.

While there are no new models in the SUV segment this season, existing ones are being given a facelift and new variants being launched.

Mahindra and Mahindra Ltd, market leader in the utility vehicle segment, plans to spruce up its flagship Scorpio and bring out a refreshed version this month.

Renault India Pvt. Ltd will be launching an all-wheel- drive Duster by the month-end. Nissan Motor India Pvt. Ltd, an affiliate of Renault, will come up with limited editions of the Terrano and Evalia.

Auto makers are retaining the discounts they offered on existing models. At Maruti, the discounts range from 5,000-48,000. These do not apply to the Ertiga utility vehicle and Celerio hatchback models, according to dealers in Mumbai and Delhi. Hyundai Motor India Ltd is also retaining last year’s festive offers, but not offering them on models like the new i20 and i10 Grand hatchbacks, and Xcent compact sedan launched this year.

Hyundai Motor India expects the festive period—which runs from mid-September to mid-January—to lead to an incremental sales of 15% against 5% last year, said Rakesh Srivastava, senior vice-president (sales and marketing).

“All the new models we have launched in the recent past have been received well and shall help us to sustain volumes even after the festive season," added Srivastava.

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Published: 20 Sep 2014, 12:59 AM IST
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