It is festival time again and carmakers are pulling out all the stops to make sure sales resurrect. Only, given the slowdown in the economy, the industry is not quite sure the discounts and freebies will help make up for the 8%-or-so decline in volumes seen so far this fiscal.
The festival season, which begins with Ganeshotsav and Onam and extends till Diwali, typically sees manufacturers offering some discounts or freebies in a bid to crank up their volumes.
This year, the discounts are visibly heavier, to say nothing of the attractive finance schemes and freebies being offered to lure in customers.
On the Chevrolet Spark, for instance, General Motors and its dealers are together offering benefits of as much as Rs 58,000, along with assured gifts on all Chevrolet cars, ranging from DVD players and laptops to LCD TVs.
A Mumbai-based dealer of Honda is offering a gold coin on every car purchased during Ganeshotsav.
Ford, on the other hand, is offering a Reliance Digital gift voucher worth Rs 10,000 on most of its cars, excluding the EcoSport in the Mumbai region.
Even market leader Maruti is offering benefits of around Rs 60,000 on cars like the WagonR and the Estillo, while Hyundai is offering a total benefit of around Rs 50,000 on the i10 and around Rs 30,000 on the i20. These discounts are borne by the respective company and its dealers together.
Still, nobody expects fireworks this season.
“The footfalls are increasing, but we expect demand to remain slower,” said a Mumbai-based Honda dealer.
The industry generally sees an additional 20% volumes during the festival season.
But sales did not pick up last year, despite some big launches.
“If last year was bad, this year can be worse,” said an analyst, requesting anonymity.
Ankush Arora, senior vice-president (commercial), passenger vehicles business unit, Tata Motors, conceded as much. “Footfalls at certain locations are increasing, like in Kerala and Maharashtra. Month-on-month volume growth is expected, but I doubt if it will be better than last year.”
Puneet Gupta, associate director, IHS Automotive Sales Forecasting, couldn’t agree more. “There are no expectations for a good second half. It’s a complete washout year,” he said.
“The household balance sheet continues to remain under pressure,” Sudarshan Shreenivas, associate director, India Ratings, pointed out. “Recovery is not expected to happen for the bulk of the market, which consists of small cars. New models may drive sales. It is unlikely that markets will recover this season. Sales are expected to remain flat on on-year basis.”
In anticipation of slower demand, some carmakers are also expected to bring in limited launches this season. These include Hyundai’s new small car Grand i10, the Tata Nano CNG, Skoda Octavia and the Nissan Terrano, along with some refreshes and special editions.
To catch up with the festive momentum, Nissan will start pre-bookings of the Terrano in September, while the vehicle will be launched in October.
“We hope that the festival is better this year and that is why we have tried to hurry the sales of Terrano and tried launching it around this period. That’s why we decided to start the pre-bookings in September,” Kenichiro Yomura, president of Nissan India’s operations, said earlier.
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