As factors such as drop in inflation and fuel prices have failed to attract buyers as sentiments remain weak, car makers are placing bets on the upcoming festive season to help boost sales. The domestic passenger vehicle industry expects to see a growth of about 15-17 per cent during the festive season, which generally accounts for 30 per cent of the annual sales volume for the automobile industry.
During the past three years, sales even during the festive season have been tepid due to weak consumer sentiment, economic slowdown, rising fuel prices and high interest rates. However, this year the industry is showing signs of ‘fragmented recovery’.
“Last three festive seasons, volume has been a challenge for us. In this scenario, I believe there is latent demand in the market. Customers are looking forward to an environment…an occasion to purchase. Festive season is one of them. In addition, inflation rate are so low and fuel prices are at the lowest levels…These are strong enablers. I believe we will see a very good festive season,” Rakesh Shrivastava, Senior Vice-President — Sales and Marketing, Hyundai Motor India told
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He added that for the auto industry the growth rate during the festive season will be around 15-17 per cent and Hyundai is targeting a 20 per cent increase in sales.
While the customers are making inquiries in good numbers presently, there conversion into sales poses a challenge. Car makers are pinning hopes on festival season to better the conversion rates.
R.S. Kalsi, Executive Director (Marketing and Sales) at the country’s largest car maker, Maruti Suzuki India, agreed that the festive season will help boost sales for the industry, adding that Maruti saw good customer demand during Onam last month.
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Two-wheeler industry, which saw good demand during the last festive season, has been under pressure for the past few months due to poor rural demand, too expressed similar sentiments.
Pawan Munjal, Chairman of Hero MotoCorp, said going forward rural sales continue to remain an area of concern. However, the company has already started stocking up inventory for the festival season, in addition to preparing for launch of new products.
“In spite on whatever the environment is…the way monsoons are…we are very hopeful, bullish on the festival season. Like every year, where we have done huge numbers during festive season, this year also we expect to do very well. We will launch two new scooter models in the next few weeks in time for festive season” Mr. Munjal said.
The growth for two-wheelers is, however, expected to be in the low single digits on account of the higher base during the last festive season.
“Industry will see a single digit growth during the festive season…and that too low single digit, as last year in September (part of festive season) industry clocked highest ever sales volume,” said Y.S. Guleria, Senior VP, Honda Motorcycle and Scooter India.