Dec 6, 2008

Business - Foreign carmakers in India cut prices to lift sales

Foreign car makers in India have slashed prices as the once booming industry struggles to prop up falling sales amid tight credit conditions, high interest rates, and a slowing economy.

South Korea's Hyundai Motor Co's Indian unit is selling its compact Santro at its 1998 launch price of 299,000 rupees ($6,020), down from the regular price of around 333,000 rupees and is offering incentives such as insurance, accessories and exchange bonuses on other models in December.

Ford Motor Co's Indian unit has cut up to 91,000 rupees off its supermini Ford Fiesta for 10 days.

"There is a slowdown in the market place and consumer confidence is low. We had a situation here. So we are taking the opportunity to stimulate the market," said Nigel Warks, Ford India's executive director of marketing, sales and service.

"We thought... let's kick some life into the market and get the customers coming in."

Hyundai Motor India's domestic car sales in November fell 23.3 percent from a year earlier to 14,605 units, while Ford India sold 2200 cars in November, 40 more than a year earlier.

Maruti Suzuki, India's largest car maker, saw sales fall an annual 27 percent in November, and sales of Tata Motors' main brand Indica fell nearly 14 percent from a year earlier.

Tata Motors said that despite orders on hand, they could not be converted into sales due to lack of financing for customers.

Discounts are being offered at the top end of the market too. Last month, Honda Siel Cars India Ltd slashed the price of its Civic Hybrid by about 800,000 rupees for four days, and said it received more than 1,000 enquiries.

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