COVID-19 has left a serious impact on the world economy with the Automobile Industry in India being the major sufferer.
Earlier Automobile companies were selling BS6 engine with a huge price difference over the BS4 prices and were offering great discounts on BS4 models. To attract buyers for the BS6 model, the auto industry in India is now providing discounts on BS6 price as much as to make the price competitive to BS4 price and absorb the transition costs onto themselves.
The Industry expert says,” The Outbreak has worsened the already struggling automobile sectors as BS6 transition taking place from April 1″
Automobile Experts estimated BS6 vehicles to be priced higher than BS4 back in 2019
There are in total 107 BS6 cars in India currently being offered by Toyota, Maruti Suzuki, Mahindra, Tata Motors and 20 BS6 Bikes in India with Yamaha, Royal Enfield and KTM being the most popular ones.
The country’s largest car maker Maruti Suzuki introduced BS6 way back in April 2019 with a price increase of Rs 8000-11000.
Mahindra on BS6 price before and after COVID-19 impact.
Late December 2019 statistics before COVID-19 impact
Mahindra First Choice Wheels CEO once said as per December stats “A number of BS4 models are now attracting hefty discounts. Given that their BS6 variants will cost Rs 10,000-Rs 50,000 more for petrol variants and Rs 50,000- Rs 1 lakh more for diesel variants, the price differential between a discounted BS4 car now and a BS6 car after April 2020 will be around 20%,”
As per recent update during Lockdown
Mahindra dealers told that some of the company’s fast selling products, including the XUV300 in its new avatar, would be priced very competitively, as close to the BS4 prices as possible. However, Company has not given any official comment so far.
India’s Auto Sector Revival
Despite hard times, all hope is not lost. The Automobile industry is all set to gear up with new offers for BS4 models and updating BS6 pricing strategy to boost customers.
Automobile manufacturers such as Tata Motors, Mahindra, Toyota, Hyundai, Maruti Suzuki are struggling to give better offers and deals for upcoming BS6 vehicles.
“We need to accept reality and respond to the market either through price cuts or discounts. We know this is not sustainable”, said a senior official of a car company.
“Till March end we were clearing BS4 models, now from this month, it’s BS6. We are sure some form of incentives will have to be given,” Tata Motors dealer said.
“Two wheelers and entry level cars are a price sensitive segment. Manufacturers will take a call depending on the situation and the way demand goes. At the moment, we don’t know the possible trigger”, Clearly, cash incentives and discounts will have to be offered to prop demand, said an official
“OEMs are skating on thin nice and may not have head room to reduce prices. But what can be done is offering financial incentives to dealers and consumers”, said Shashank Srivastava, Executive Director, M&S, Maruti Suzuki
Buy BS6 vehicles as close to BS4 prices
Top car manufacturers are expected to absorb BS6 Transition costs to increase sale after lockdown.
Skoda Auto Volkswagen India Ltd. recently announced prices of the BS6 Polo and Vento at a more accessible price point for Indian customers.
Prices of the BS6 petrol powered engine, ranges from INR 5.82 lakh up to INR 9.59 lakh for Volkswagen Polo and INR 8.86 lakh to INR 13.29 lakh for Volkswagen Vento (ex-showroom). The Price range remains as close to BS4 car prices.
Toyota is selling BS6 vehicles since January and expresses they will not burden customers with BS6 high price altogether as already sales are very low. For BS6 diesel vehicle, which is required to be priced upwards by Rs. 1.5 Lakh while companies have hiked up to Rs. 80,000 for consumers and residual cost of Rs. 70,000 have been borne by the Automobile companies themselves.
The Cheapest BS6 car in India is currently priced at Rs. 2.92 lakh while the cheapest BS6 Bike is available at a price point of Rs. 52,800.