The Hindu Business Line : Carmakers bet big on loyalty schemes

Automotive manufacturers in India, like their counterparts in matured markets across the globe, have begun to offer new financing, loyalty and buyback options, which have the potential of further bolstering car sales.This is by both building loyalty programmes and making the customers stick to the same manufacturer offering upgrades to new and higher models laced with good finance options. More importantly, it saves the customers hassles of disposing off their car in order to upgrade.

Earlier this week, Hyundai announced the launch of a scheme, which will be operational in select cities for its big hatch Getz. Describing it as a structured finance and buyback scheme, Hyundai said that a customer can use the car for 35 months and has the option to either pay the balance amount at one go and own it or surrender it and upgrade to a new car from the company's stable. The company also offers a hassle-free buyback.

Barely two days ago, General Motors India had announced through newspaper advertisements — "Own it, enjoy it and return it," option for its C Segment sedan Chevrolet Optra. Under this scheme, the company offers a three-year, 60,000-km and maintenance-free guaranteed buyback option, for those who wish to upgrade to another car.

Earlier this quarter, Maruti had announced a customer loyalty programme, wherein a buyer of a new car would get Rs 20,000 as bonus, which he can avail himself of when he buys another car from the Maruti stable. Lately, it has been promoting the cause of its C segment sedan Baleno, with an option for its Esteem owners to upgrade. Under this scheme, a 2002 model Esteem owner would be offered about Rs 2,60,000 and will have the advantage of upgrading to Baleno. This comes with a loyalty bonus and special offer (together bringing down the cost by Rs 75,000), and the customer can buy Baleno with more or less similar monthly instalments.

Given the advantage such schemes bring, it appears this is just the beginning of a new trend, and would encompass other cars and models as well. However, carmakers need to contend with the fact that in India owners don't change cars as often as three years. May be such schemes would prompt them to go for upgrades faster.