[arup.misra]

Suprising move indeed but I believe they won't be alone. Maruti too is curtailing discounts

"Maruti Suzuki India Ltd. (MSIL), the nation’s biggest carmaker by volume, expects an increase in sales of diesel cars and a new version of its Alto hatchback to cut discounts that surged to a record in the second quarter. The carmaker aims to lower discounts it offers over the next two quarters from an average of 14,750 rupees ($273) a vehicle in the quarter ended Sept. 30, Chief Financial Officer Ajay Seth said at a briefing in New Delhi yesterday. The discount in the first quarter was 11,646 rupees, he said"


Source - http://www.businessweek.com/news/201...-cut-discounts

[sourabhzen]

Originally Posted by arup.misra

Suprising move indeed but I believe they won't be alone. Maruti too is curtailing discounts]

Maruti can afford it as they are selling a lot of cars and they are planing to lower the discounts in next two quarters.

Skoda is lowering the discounts as it may not be impacting the sales as much as they anticipated, due to their after sales harrasment stories.

[Omtoatom]

Interesting strategy although this is a bit of a two-edged sword - could backfire badly as well. In the current scenario, the general buying sentiment is almost demanding for discounting/rebates. A manufacturer like Skoda taking an "unyielding" stance on pricing, however attractive it may be, might still put a lot of customers off. Also Skoda now much infamous A.S.S. is not going to be the best starting step for this approach. Could easily be construed by the buying folk as an arrogant/unfriendly gesture by the Czech carmaker.

[gandalf]

This is a really funny move by skoda. They are not able to sell cars that are better (and cheaper) than the competition with all the discounts that are in place. now with the discounts removed why would anyone buy Skoda.

Their vehicles are really good. But their After sales service reputation is among the worst (if not the worst) in ALL of india. Anyone looking for hassel free ownership would never choose Skoda.

Now, even the penny pinchers would run away.

[ghodlur]

The surprising decision in the middle of Indian festival season underlines Skoda Auto India's ambitious stance of cutting its dependence on the prevalent Indian auto market practices

Bad move by Skoda. Its their loss any ways adding to the existing pathetic sales figures. What are they trying to do - Change the way Indian customers buy the car. Two statement they cant ignore in Indian auto market - "Kitna deti hai" (whats the mileage) and "kitna discount milega" (how much discounts offered). If their after sales service had been excellent, customers would have still thought about buying Skoda cars, with no discounts they are doomed however good vehicles they manufacture.

[nilambuj]

This will further dent their sales. I am not really too sure what is the driving factor behind this move. When most of the manufacturers are making new offerings and discounts to exploit the festive season, Skoda is going tangent.

[shankar.balan]

I guess every brand needs to stop excessive dilutions and discounting as a practise at some time in its journey of development. Deep discounts tend to become the rule rather than the exception especially in value seeking developing markets and this significantly erodes the aspiration value of the brand!

[torquing_points]

This is actually a smart move. Think about it. If you're concerned about the horrid after sales, then no amount of discount will bring you in.

If you're only going by initial impressions and log term running costs aren't part of your decision metric, then you'll buy it even without a discount.

So the discount isn't helping substantially to convert non buyers to buyers.

Their after sales strategy might have been drafted by an intern who used to work at as a club bouncer, treating customers with as much respect and intellect as that - , but their pricing strategy seems like there's a smart guy at the helm.

Hey. Skoda. How about move your marketing genius to after sales. And move your after sales strategist to club bouncing.

[Omtoatom]

Originally Posted by torquing_points

Their after sales strategy might have been drafted by an intern who used to work at as a club bouncer, treating customers with as much respect and intellect as that - , but their pricing strategy seems like there's a smart guy at the helm.

Hey. Skoda. How about move your marketing genius to after sales. And move your after sales strategist to club bouncing.

Ouch! That is severe buddy!!

On a serious note however, they'll need to think long and hard about how they're going to overhaul their rather unenviable image first before really dishing out sales strategy lessons - you know get a thorough autopsy done. Fix the issues first, rather than creating fresh ones huh.

[YVES]

Big Brands never give discounts , read Apple , Merc's & BMW.
Good to see Skoda following the right strategy or are they are forced to reduce discounts for lack of profits? time will tell

[swiftnfurious]

Bad move from Skoda. I believe a good number of people in the forum buy cars based on the discounts they get. And I interpret that after discounts, some of these cars get to the level of competition & seem VFM compared to rest & gets to the final list (and some of these cars get to the list ONLY because of those sweet discounts).

And companies like Skoda, if you don't want to offer discounts, you better price the cars sensibly. With the kind of reputation you have, dont expect many people to pay premium rates.

Originally Posted by YVES

Big Brands never give discounts , read Apple , Merc's & BMW.
Good to see Skoda following the right strategy or are they are forced to reduce discounts for lack of profits? time will tell

Apple always had atleast 100000 advance bookings at MRP. When they have huge waiting, why would the company want to sell it at a discounted price.

Apple's marketing strategy is completly different. There service is Top Notch atleast, They just replace if you complain of any problem in the very first year Even though you cannot reproduce the problem.

Skoda's service is quite opposite. Even if you show the problem, they say that its working fine. Thats a different service altogether.

Regarding Discounts, Merc has given some 5L worth Fuel cars to their petrol car buyers. Isnt it a discount?
BMW has offered a 19.XX lakh price tag for X1. isnt it a discount?

If you want me to pay the same amount for a 2012 car and 2013 car, then i would obviously choose the latest one. Why should i pay the same price for old year car, even if it was manufactured on 31 dec 2012?

Making profit can be done in two ways.
Push more volumes, by giving discount. More cars for service, more money comes to all.
No discounts, few sales, more profit, but no cars to serve in future. so dealers would be in loss.

I prefer the first mode rather than going by second one. My 2 cents.

[mayankjha1806]

Weather this will span out positively or negatively on Skoda sales is something only time will tell, maybe they might be removing discounts and pricing their products more competitively (that i would guess would be a better strategy).

Discounts cannot sell a bad product, it can only tilt decisions between two good products.

[radek]

Originally Posted by YVES

Big Brands never give discounts , read Apple , Merc's & BMW.

Add 'Yves Saint Laurent' to that.

On serious note, car pricing may soon go the way airline pricing has gone. Though every airline is bleeding, no one dares to raise prices fearing loss of marketshare. But when such situation worsens if someone takes the lead, others may join by hiking their pricing.

Success of Skoda's move depends on how many others join. Otherwise Skoda will end up loosing marketshare.

[BinFord]

In spite of all these gimmicks if Skoda cannot raise the standard of their after sales service ,they won’t be able to catch up the Indian car market share. Gone are those days where people still obliged to the dealers for after sales service and other stuffs. Now a days we have endless option of brands to choose from. So Skoda “writing is on the wall” unless you change your attitude towards customers.

Mind it “Customers are your real advertisers”. Without their support no brands can survive in this competitive modern world.