Major players have quickly acquiesced to the demand of the FM to cut prices in the hope of special incentives such as excise duty cuts in the government’s impending Rs 75,000 crore economic stimulus. Many government official are especially worried about the automobile and real-estate sectors as they have a huge spillover effect. “The industry is asking for excise cuts and restoration of some benefits for exports,” said Surajit Mitra, additional secretary, ministry of heavy industries and public enterprises. “We will engage with the finance and commerce ministries to discuss how the industry can be helped.”

But analysts remain unconvinced of the ability of discounts to translate into sales because of the mounting negative factors such as recession, the fear of job loss, salary cuts and, most seriously, financial crunch.

Baja Auto is planning a low-interest finance scheme for dealers at 7.99 per cent to boost sales. In addition, it will introduce a new motorcycle every month for the next six months in the hope that a revamped product mix will also entice skittish customers.