It is raining strange goodies in auto market

HT Correspondent, Hindustan Times
New Delhi
First Published: 22:52 IST(19/4/2013)
Last Updated: 02:48 IST(20/4/2013)
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Cash discounts and price cuts are now passe in India's autoland.

Premium car makers facing a slowdown in demand for the first time in India are offering a range of goodies from free insurance and maintenance, attractive interest rates to free petrol to lure customers.

That is not all, through schemes such as operating lease, the affordability of the cars has also come down enabling traditional consumers from a segment below to go for a Mercedes, BMW or Audi.

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This is a striking departure from the marketing initiatives of the past when companies basically banked on discounts and free accessories to sweeten the deals.

"The bundle of measures rolled-out under 'Merconomics' is comprehensive. It targets the growing set of intenders and potential customers of the three pointed star in India," said Eberhard Kern, managing director and CEO, Mercedes-Benz India. "It includes measures that enhance affordability during purchase of a Merc."

Another game changer is the option of operating lease on such cars, which allows consumers to use them without really owning them. The option of tax benefits on the installment outgo that is missing on an average finance scheme, further heightens the attractiveness of it.

The impact of such schemes on actual sales have been tepid so far but experts believe it will help stimulate some demand in an otherwise stagnating segment.

"I don't think these offers will help expand the segment as such but given that it is stagnating, it will help individual companies to shore up numbers and maintain or gain some marketshare," said Kumar Kandaswami,  leader manufacturing, Deloitte India.


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