Entry-level passenger vehicles and sedans priced under₹10 lakhs will continue to see discounts that may be even higher this festive season due to demand stress in the Indian automobile market and in the segment in particular. Discounts ranging from ₹20,000 to ₹80,000 on select models are being offered by Original Equipment Manufacturers (OEM) during this festive season. Dealers have stated that the demand for entry-level hatchbacks and sedans continued to decline as SUVs reported robust growth across urban and rural areas. “The heavy discounts come at a loss for the dealer, but we do not have many options. The demand continues to decline in entry-level cars and footfalls have not returned to earlier levels. On entry-level vehicles, we are offering a discount starting from 20,000 rupees,” said an automobile dealer based in Mumbai. According to Tata Motors demand in the sub-10 lakh segment has declined year-on-year, resulting in increased discounts by OEMs and dealers to get the inventory moving. “There are specific models where we are seeing significantly high discounts. Main pressure is in the less than ₹10 lakh segment, where the demand is under stress. It has seen a nearly 15 per cent decline, as compared to last year. This segment is under stress, and we will continue to see discounting. We are also now starting to see a flattish trend in SUVs, and that is also something which we need to watch out for,” said Shailesh Chandra, Managing Director of Tata Motors Passenger Vehicles, in an analyst call. Dealer discounts Dealers have pointed out that with demand continuing to be muted, they have increased discount offerings on vehicles. “The dealer inventory this year in August continued to remain between 50-55 days. The challenge will come in September. If the inventory further increases, dealers will have no option other than offering additional discounts on top of OEM offers. However, as good monsoons were reported this year we are hopeful that the demand will return this festive season,” said Manish Raj Singhania, Chairman, of Research & Academy, FADA. Passenger vehicle industry growth “The first four months have been absolutely zero per cent growth. The last two months have been negative by 3 per cent, and we have maintained that for the full year, we are going to see about, again, less than 5 per cent growth. We are seeing the demand pattern mimicking what we had seen in the last financial year. The last financial year had a strong festive season as well as December sales. We believe that the trend will continue,” added Shailesh Chandra. Further, the company stated that the passenger vehicle industry will see a growth of upto 2 per cent. “In hatchbacks, while the industry is declining by 14 per cent, we are seeing growth. We have launches in the coming quarters, and it should significantly improve from here on,” he said. In the first quarter, CNG continued to do well with 20 per cent growth this year. The EVs will see 70 to 75 per cent growth, he added. Published on August 17, 2025