The affordability challenge is already visible in the sports utility vehicle (SUV) market, where festive discounts have edged up as companies compete for customers.

For dealers, the key question is whether showroom enquiries will translate into actual sales.

Last year’s goods and services tax (GST) rate cuts gave festive season car-buying in the country a powerful tailwind, helping push passenger vehicle sales to nearly half a million. This year, automakers must chase that high-water mark without the price stimulus that helped deliver it. New launches, bigger discounts and fuller dealer yards are all part of the pitch, but higher vehicle prices could leave buyers doing the arithmetic rather than signing on the dotted line. Some may settle for cheaper variants, others may turn to used cars or put off buying altogether. Advt

The affordability challenge is already visible in the sports utility vehicle (SUV) market, where festive discounts have edged up as companies compete for customers. But incentives may not be enough to overcome buyers’ concerns, particularly as they weigh down-payments, equated monthly instalments (EMIs) and ownership costs. For dealers, the key question is whether showroom enquiries will translate into actual sales. “Price hikes before Navratri can be a dampener. They could lead to customer setbacks and delays in purchases,” said Vikesh Gulati, an automotive dealer. “The biggest challenge is the demand-supply mismatch. The aggression to retail is there, but the desperation to retail is not.”

Dealers are carrying elevated inventories ahead of the festive season. While higher stocks allow them to meet a potential surge in demand, unsold vehicles tie up working capital and could increase pressure to offer discounts if retail sales fail to keep pace.

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