7th Pay Commission Effect – Govt Employees Showered with 2 Wheeler Discounts

7th Pay Commission Effect – Govt Employees Showered – Government employees and their families comprise a large chunk of two-wheeler customers.

Two-wheeler majors, including Hero MotoCorp and Honda, have started offering exclusive discounts and offers to govt employees and pensioners to expand sales. This concessions to the govt employees comes after enhanced pay packages under the 7th Pay Commission comes into effect from January this year.

The country’s largest two-wheeler maker Hero MotoCorp is offeringcash discounts of Rs 1,500 on every product (motorcycles and scooters), irrespective of ticket size. For govt employees residing in Delhi, insurance worth Rs 1,600 is also being offered gratis. “The scheme is available to only government employees and their family,” said a Delhi-based dealer. 

The second biggest player, Honda Motorcycle and Scooter India (HMSI), is offering steep benefits of up to Rs 10,000 for govt employees on three motorcycle brands – Dream Neo, Dream Yuga and CB Shine. These include cash benefit of around Rs 2,000 and discounts on bike financing. The offers though are valid till September.

“Government employees and their families comprise a large chunk of two-wheeler customers. The disbursements before festivals accelerate purchasing power. We have seen a healthy growth in individual buys by government employees, compared to the same month last year. As benefits continue in the festive season, so do buying,” said Yadvinder Singh Guleria, senior vice-president (sales & marketing), HMSI. 

The domestic two-wheeler industry had grown by a paltry three per cent in FY16, as the rural economy faced challenges due to a below-normal monsoon. The two key triggers – a normal rainfall and increased salaries of government employees – are expected to drive volumes this year. In the April-July period of the current year, domestic two-wheeler sales have grown by 14 per cent.

“The increased payout is godsend for automobile companies. We expect increase in sales of two-wheelers, owing to improved purchasing power and changes in socioeconomic lifestyle. TVS Motor Company has announced various schemes targeted at these customers, which include huge savings on finance schemes, extended warranty, etc. We are offering these schemes both for existing central government employees as well as pensioners,” said a spokesperson at TVS Motor Company.

Top car makers had also announced sops for govt employees. Hyundai is giving benefits of Rs 7,000 on the Grand i10 and accent and Rs 5,000 each on the i10 and the Eon, in addition to the existing promotional offers for central government employees.

Tata Motors announced a scheme for central and state government employees, offering them benefits such as additional cash discounts or the option to buy extended warranty policy, annual maintenance packages as well as accessories on the purchase of a Tata car, except for the recently launched Tiago.

Source: BS