With price wars escalating, the best period to buy a car has begun

“We are getting into what is called a buyers’ market,” said a leading automobile dealer about the current sentiment in the passenger car market. On July 10 evening, two of India's biggest competitors Tata Motors and Mahindra Group slashed prices of their leading SUVs within hours of each other.Tata Motors reduced the starting price of the Harrier by ₹50,000 and for the Safari by ₹70,000. Tata Motors is also offering benefits of ₹1.4 lakh. The Mahindra Group, on the other hand, has reduced prices of its top AX7 model of XUV700 by almost ₹2 lakhs.That's not all. Across the board, all car makers have launched discount schemes this month.India's leading car maker Maruti Suzuki is offering discounts on almost all models. For the Alto K10, you could get a discount in the range of ₹30,000 to ₹45,000, plus a ₹15,000 exchange bonus and a ₹3,100 corporate discount. There is a ₹15,000 exchange bonus and corporate discount on the new Swift and discounts up to ₹35,000 on the Fronx. You could get a ₹3.3 lakh discount on the Jimny, including an additional ₹1.5 lakh if you buy the car through Maruti Finance.Similarly, Renault is offering discounts up to ₹40,000, MG Motor in the range of ₹25,000 to ₹2 lakh and Hyundai up to ₹45,000.Nikunj Sanghi, former President of Federation of Automobile Dealers Association (FADA) and a leading automotive retailer in Rajasthan, says the current situation is both due to a lean season and urgent need for inventory correction."Q2 is generally a lean season with low demand due to rains, sowing season in rural India and very few marriages. Plus the inauspicious period or Shraddh is also observed in North India. This is a time when companies go all out to meet sales targets and they also want to start the festive season in Q3 on a positive note". He added that the car dealers expect discounting levels to rise even more in the coming months.Manish Raj Singhania, President of the FADA expressed concerns about the ₹60,000 crore worth of inventory in the dealer network across the country. He said, there were recently 6.5 lakh unsold cars in the system which has left companies and dealers with no choice but to offer heavy discounts.“With PV inventory levels reaching an all-time high of 62-67 days, we have observed a significant shift from the supply-driven market seen during the COVID period to a demand-driven market. During times of supply constraints, OEMs enjoyed sales with zero discounts. Naturally, as market dynamics have changed, we are seeing an increase in discounts", he said.Passenger vehicle dispatches from OEMs were the highest again in May this year at 3.47 lakh units, although with a moderate growth of 3.9% according to industry body SIAM. These high dispatches over the past few months have caused a demand supply mismatch at present which dealers hope will be corrected through discounts.For several months now, top car makers have been saying that after two years of strong pent up demand, there is going to be a demand moderation going forward. Reacting to May wholesale dispatches, SIAM President Vinod Aggarwal had said that passenger vehicles had only seen a moderate growth, primarily owing to a high base effect of the previous year.It now remains to be seen whether price corrections in car prices are here to stay and whether there will be any significant pick up in demand H2 onwards.