Car manufacturers in India have been introducing models at a lucrative base price, while there has always been a considerable price difference with the feature loaded higher variants. Apart from the novelty factor of introducing a new model at a competitive price, a majority of the customers have most often opted for a top-spec variant. Times have changed now, read below to learn why –
Change in demand
As per Vinkesh Gulati, Vice President, Federation of Automobile Dealers Association, new car customers are now opting for lower variants instead of a top-spec feature-loaded variant. Moreover, there is a significant increase in demand for the base variant. In terms of numbers, car dealers have witnessed about 60 per cent increase in demand for the lower variants. Uncertain market conditions has also encouraged customers to settle for lower variants rather that spending more on a top-spec variant. Additionally, the lower spec models are readily available as compared to a fully-loaded variant. That said, there is no significant change in trend in the luxury segment.
BS6 has not affected sales
BS6 compliant cars do cost more as compared to the BS6 model, however as per Gulati, sales in the personal vehicle segment have not been affected with the BS6 update. Car sales have been low in the first quarter of the financial year 2021 mainly because of limited stock and government restrictions that caused logistic issue for OEMs. As supplies have started reaching dealerships in July, there has been a significant improvement in car sales. However, the commercial segment has been affected with the BS6 update due to a substantial hike in price and uncertain market condition for a potential buyer.
Conclusion
Swimming against the tide, new car buyers are opting for lower spec variant as it shields them from paying extra for a top spec variant. Moreover, the lower spec variants are also readily available. The lucrative base variant sticker price is now luring in buyers seeking an affordable option, while simultaneously avoiding commuting by the public transport system. Car sales in general is expected to be low this year, however, the industry expects to attain about 80-85 per cent of sales this festive season as compared to the festive season in 2019. It is only after March 2021, that the industry is expected to witness some positive sales growth.
