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Hyundai's Venue sparks price war in SUV segment

RACE BEGINS: Maruti Suzuki doling out offers on Vitara Brezza, Tata Motors on Nexon and Ford on EcoSport

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Competition seems to be heating up in the compact sub-4 metre sports utility vehicle (SUV) segment during the ongoing peak summer month of May.

With country's second-largest carmaker Hyundai Motor clocking more than 17,000 bookings of its latest SUV Venue, the rivals have started offering discounts in order to counter it.

Hyundai Venue has been priced competitively with its base model costing Rs 6.5 lakh and the higher variants going up to Rs 10.84 lakh.

According to the dealers and industry insiders, market leader Maruti Suzuki India, which is trying to fiercely protect its most successful SUV Vitara Brezza is doling out offers in the form of Rs 15,000 cash discount. Plus, there is also Rs 15,000 worth of exchange bonus, apart from corporate bonus valued at up to about Rs 3,000.

Similarly, Tata Motors is offering a discount of Rs 15,000 on its diesel model of its SUV Nexon, in addition to Rs 15,000 exchange bonus. Plus, it is offering corporate discounts of up to Rs 3,000. Likewise, for Nexon's petrol variants, the cash discount remains at Rs 15,000 and up to Rs 3,000 of corporate discounts. Ford Motor is offering cash discounts of Rs 10,000 and Rs 15,000 of exchange bonus and up to Rs 5,000 of corporate discounts for its SUV EcoSport. These discounts are being offered in major metros, including Mumbai and Delhi, industry insiders said.

According to Sridhar V, partner, Grant Thornton India LLP, the way for the competition is to either get a comparable product or more than meet the pricing to retain their market position or even not lose the market share. "The first one takes time. The second one is a short-term solution and easy to resort to," said Sridhar.

Analysts claim that apart from the competition, the discounts could also be offered to rejuvenate the prolong slowness is sales. The dealers who have been facing high inventory levels are also trying to ease the situations by offering some discounts on their own.

Industry observers said that though the industry has been experiencing a sales slowdown, SUV segment is doing relatively well. As a result of which the original equipment manufacturers (OEMs) are trying to push the sales using new launches and discounts.

According to Kanika Goyal, an analyst with India Ratings & Research, the PV sales volume declined due to weak buyer sentiments on account of higher insurance premiums, increase in fuel prices as well as interest costs. Buyers were also delaying purchases on account of the political uncertainty witnessed during April-May 2019 due to the Lok Sabha elections. "Sales were also impacted by various regulatory changes in the industry such as BS VI, FAME II as well as alternate mobility. The lack of clarity on the policy front could lead to uncertainty in the demand pattern in fiscal 2020," Goyal said in her latest report.

SALES PITCH

  • Tata Motors is offering a discount of Rs 15,000 on its diesel model of its SUV Nexon, in addition to Rs 15,000 exchange bonus
     
  • Maruti Suzuki is doling out offers in the form of Rs 15,000 cash discount on Vitara Brezza
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