Monday, 18 July 2011

Honda Motorcycle, Bajaj Auto, TVS Motors Dealers offering freebies on two-wheelers

After a gap of more than four years, freebies are back in the two-wheeler market. Dealers are wooing customers with cash benefits and lower interest rates to get some traction on sales.  Although the two-wheeler market is still going strong with double-digit growth, a few bikes are facing the heat on declining customer interest and have joined the discount bogey. 

For instance, sales of Honda Motorcycle and Scooter India's premium 110cc bike, CB Twister, priced at an ex-showroom price of Rs 49,775 in Delhi, have been sluggish due to competition from biggies like Hero Honda's Splendor that comes at a lower price of Rs 41,350.  Dealers are thus offering discounts of up to Rs 3,500 in select markets on the CB Twister. 

"We are offering some benefits to reduce our stocks as the market has been slowing with retail sales getting impacting and cautious customers postponing their purchase decisions," a central Delhi-based Honda dealer said. The market has not been impacted much by rising fuel prices as by surging interest rates which have shot to over 22-24% in the past one year, rising by around 4%.

"The interest rates for two-wheelers has risen more compared to cars as the risk is high though the total value of vehicle is much lower. There are a few models where dealers are vying for customers attention by discounting rates," a top executive of HDFC Bank said. The benefits are mainly coming from dealers as companies maintain that they have not initiated any freebies yet. 

"The two-wheeler market is still going strong and we do not see any reason to offer any benefits now," said head of marketing at Bajaj Auto , Milind Bade. However, the company's 100cc entry level bike, Discover, is being offered at 0% rate of interest. Analysts tracking the market say that discounts from dealers are precursor to what the company may offer in few months. 

The dealers of TVS Motors is luring customers with a few insurance and road tax benefits in certain markets on their 110 cc Star City bike with deal benefits of up to Rs 1500.


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