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Maruti Suzuki, State Bank of India announce sops to boost sagging car sales

The move from the market leaders is likely to be followed or matched by other industry players.

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Auto makers and bankers seem to be upping their efforts to boost car sales, which have taken a hit over the past few quarters. Leading names like Maruti Suzuki and the State Bank of India have announced a number of steps they think could make buying cars and taking car loans more attractive to customers.

Maruti Suzuki for instance has announced that it would provide free warranty of five years or 1 lakh km on its diesel vehicles. The warranty would be available on diesel variants of the S-Cross, Vitara Brezza and Swift.

The push also comes against the backdrop of the general fall in the popularity of diesel vehicles. The thinning of the gap between the prices of petrol and diesel in recent years coupled with growing perceptions that diesel is a highly polluting fuel have led to a general drop in diesel vehicle sales.

Maruti Suzuki too had announced earlier that it would stop manufacturing diesel vehicles from April 2020, coinciding with the operationalisation of the Bharat Stage-VI emission norms.

The State Bank of India too is attempting to make changes to its service offerings in a bid to raise the number of car loans. These efforts were part of the banking giants larger push to increase the roll out of its credit products.

SBI announced that it would waive the processing fee for car loans, and also offer what it claims will be the lowest interest rates on auto loans on the market. SBI has announced a base interest rate of 8.7 percent on car loans with an extra 0.25 percent concession for individuals who apply for car loans on its digital platforms. The bank has also announced that its car loans would come with no interest escalation.

The push by India's largest car maker and bank are likely to be mirrored by similar efforts by other market players.

Falling car sales over multiple successive quarters have been seen by some analysts as signs of an economic slowdown. The efforts from banks and car makers are aimed at increasing consumer spending in the market to not just push inventories and meet corporate targets, but also spark an increase in domestic consumer spending.

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