Mauritian Car Dealers Cut Prices Up to Rs 400,000 to Shift Stagnant Stock

Mauritian car dealerships are locked in an aggressive race to clear swelling inventories as vehicle sales have crashed by approximately 40% following swingeing excise duty increases.

The local automotive market has been in a sharp downturn since August 2025, triggered by a June fiscal overhaul that ended tax incentives for hybrid and electric vehicles.

While June 2025 saw a record 3,743 units sold as buyers rushed to beat the deadline, the subsequent implementation of tax rates between 45% and 100% has left showrooms struggling to shift stock.

Price Hikes Stifle Demand

The new fiscal measures have seen retail prices soar, pushing popular models out of reach for the average household. According to industry data:

• High-end models previously priced at Rs 2.1 million have jumped to Rs 3.2 million.
• Mid-range vehicles have climbed from Rs 1.5 million to Rs 2.2 million.
• Entry-level cars formerly costing Rs 1.2 million now retail at Rs 1.9 million.

Mrinal Teeluck, Secretary General of the Motor Vehicles Dealers Association (MVDA), noted that average monthly sales have dropped significantly from the pre-budget benchmark of 1,500 vehicles.

“Stock has accumulated because orders could not be cancelled after the budget announcements,” Mr Teeluck explained, adding that the costs of storage and capital tied up in unsold units are becoming an increasing burden for dealers.

Desperate Promotional Blitz

In response, showrooms have intensified promotional offers since the start of the year.

Discounts currently range from Rs 50,000 to Rs 400,000, alongside extended warranties.

However, Mr Teeluck warned there are limits to these concessions, noting it is “impossible” to offer a Rs 500,000 discount on a million-rupee car.

Zaid Ameer, President of the Dealers in Imported Vehicles Association (DIVA), confirmed that the second-hand market has also been hit, with sales down by 35% to 40%. Only small trucks and vans continue to show resilience.

Cost of Living Crisis

The slump is being exacerbated by broader economic pressures. Mr Ameer highlighted that rising costs for electricity, fuel, and food have shifted consumer priorities toward essential spending.

“There is no light at the end of the tunnel,” he said, citing a “trauma” lingering from the pandemic era and international economic uncertainty.

Hopes for Budget Reform

The industry is now pinning its hopes on the next national budget. Dealers are preparing proposals to lobby the government for a tax review, particularly for hybrid vehicles which offer 50% fuel savings.

Data suggests that the state’s expected revenue from these tax hikes may not have been met due to the collapse in volume, a factor the DIVA believes could lead the government to reconsider its current fiscal stance during upcoming consultations.

Source: l’Express