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Rise in festive sales lights up retail sales for car makers

Car makers report better sales during Dussehra and Dhanteras over last year; see trend continuing for the rest of the year

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Car sales which were lacklustre in the festive season last year are sparkling this year with buyers thronging showrooms to drive out favourite models.

Companies including Maruti Suzuki, Hyundai Motor India and Honda Cars India have witnessed healthy retail sales during Dussehra and Dhanteras considered to be auspicious for high-value purchases.

Festive season is a period when most car companies see at least 20% incremental sales. However, last year they were a disappointment owing to slowdown in the economy. Two-wheeler sales had remained flat while demand for cars did not meet expectations.

As the industry comes out of slowdown this year and economy looks up, auto companies expect the demand to remain strong during the year ahead, too.

"We are seeing heightened interest of consumers by at least 20% this year for Hyundai models. The growth is led by strong enquiries of our new models like Elite i20, Grand and Accent," said Rakesh Srivastava, senior vice-president - sales and marketing, Hyundai Motor India.

"Factors like drop in fuel prices and stable interest rates have also increased the consumer confidence. Owing to near to average monsoon, there is strong demand from rural areas as well," he said.

Speaking about festive season sales this year, Honda Cars India's, Jnaneswar Sen, senior vice-president marketing & sales, said, "For the industry as a whole, festive period in this year will be better than last year as the market has shown signs of improvement in consumer sentiment. This sentiment is very important for industry like ours and impacts car sales directly. The sales have picked up in the first half of this fiscal, and this momentum is continuing."

The company recently launched its first multi-purpose vehicle Mobilio. "The festive period this year has been very good for Honda Cars India. Footfall at showroom has increased by 20% over the last year. With a rich model portfolio including Mobilio and sedan Honda Amaze and Honda City, we are very confident that this festive season will attract many customers to the Honda brand, and we are geared up for strong sales in coming months," he said.

Dealers of Maruti Suzuki also indicated that the company has already received a good number of enquiries and conversion to sales. It also launched its mid-sized sedan Ciaz few days before the start of the season. With diesel prices going down, companies expect certain increase in interest in buying diesel vehicles going ahead.

After a slowdown of almost three years, the industry this year is seeing steady volume growth every month. Passenger vehicle sales grew 4.25% in April-September 2014 over the same period last year. Within this, passenger cars and utility vehicles grew 4.09% and 12.17%, respectively, according to Society of Indian Automobile Manufacturers.

Despite growth in sales, a section of the industry prefers to wait and watch.

"Though most of the manufacturers are confident, November will challenging as Diwali was in November last year, hence there will be a strong base effect. And December is generally a slow month for car sales," said a banker on condition of anonymity.

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