Tata Motors Cuts Car Prices By Up To Rs 2 Lakh Amid Flagging Demand

Tata Motors Ltd. has cut by up to Rs 2 lakh prices of its passenger vehicles to propel festive sales amid waning demand.

The offer—applicable only on the company's internal combustion engine cars such as Tiago, Tigor, Altroz, Nexon, Harrier and Safari—is valid until Oct. 31, 2024.

There are no offers on the Tata Punch—India's best-selling car at present.

According to the Tata Group company, the discounts are part of its so-called 'Festival of Cars' for the upcoming festive season.

"With total benefits of up to Rs 2.05 lakh on ICE vehicles, this year’s festive celebration includes limited-time attractive price reductions, along with attractive exchange and cash benefits," Vivek Srivatsa, chief commercial officer at Tata Motors, said in a statement. "We're confident that customers will seize this exceptional opportunity to own a Tata car, bringing home the best of safety and design, making this festive season truly special."

To be sure, Tata Motors has announced discounts amid sales that have lagged for at least two straight months amid rising inventory.

In August, the Nexon maker shipped 44,142 cars to dealerships, as against 45,513 units a year ago—a decline of 3% year-on-year. Retail car sales—measured as vehicle registrations on the government's VAHAN portal—dipped 2.67% year-on-year to 38,788 units.

The scenario isn't brighter for the wider industry as well.

Retail car sales fell 4.53% year on year to 3.1 lakh units in August 2024, according to a statement released by the Federation of Automobile Dealers Association on Sept. 5. Sequentially, the number was down 3.46%.

"This monsoon season has brought unpredictable weather, starting with extreme heat waves that delayed monsoon and transitioned into heavy rainfall, leading to flood-like conditions in several areas," FADA President Manish Raj Singhania said in the statement. "These weather anomalies have had a direct impact on India's auto retail market, which registered a modest year-on-year growth of just 2.88% in August."

The slump has simply exacerbated the inventory woes at the dealerships, even as carmakers claimed to have realigned production with demand.

India's car dealerships are saddled with unsold stock worth Rs 77,800 crore, equivalent to 78 lakh vehicles or 70-75 days of inventory, FADA said.

The grim sales picture, thanks in no small measure to the unprecedented monsoon, now threatens to spill over into the festive season.

"Festivals such as Ganesh Chaturthi, Onam, and Navratri are expected to uplift sentiment, particularly in urban areas," FADA said. "Favourable rainfall in some regions has improved agricultural prospects, which may boost rural sales post-monsoon."

On the flip side, the India Meteorological Department has forecast heavy rains in September, which could damage crops and weaken rural purchasing power. Additionally, the Shradh month—an inauspicious period for purchases—is expected to pause car sales in September.