Lower interest rates may not add sparkle to Diwali car sales

Oct 12 2013, 10:32 IST
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SummaryThey are expecting only a 10-15% jump in volumes over other months of this fiscal

Aided by lower interest rates by banks, auto companies have lined up a bevy of attractive offers inducing customers to loosen their purse strings during the ongoing festive season, which began with the Navratras on October 5 and will peak with Diwali in early November.

Still car makers like Maruti Suzuki, Tata Motors and Hyundai remain extremely cautious about predicting any strong boost to sales after the prolonged slump this year. They are expecting only a 10-15% jump in volumes over other months of this fiscal, compared with the 20-30% rise normally seen in the festive months of a good year.

Mayank Pareek, COO, marketing & sales at Maruti Suzuki, said, “After such a bad period of the last seven-eight months, there are some signs of improvement. Bookings are increasing, but we still need to keep our fingers crossed. At this time of the year, everybody stocks up completely.” Maruti has a 40% share of the 27-lakh-unit domestic passenger vehicle market.

“We expect volumes to be about the same as last year, maybe a 3-5% growth over the same period in FY13,” another Maruti official added.

Nalin Kapoor, group head for marketing at Hyundai Motor India, confirmed, “There is definitely some improvement as compared to other months. But as compared to last year it is subdued. Some clarity will emerge after the Navratras.”

“I do not think car makers expect much to happen this festive season. Firstly there are not too many launches, and also the market is not going up on an overall basis,” said Kumar Kandaswami, senior director of Deloitte Touche Tohmatsu India. Usually festive months see multiple launches, but this year Hyundai Grand i10, Skoda Octavia and the Nissan Terrano are the only cars to debut in the period.

However, successful new launches of the past few months, like the Honda Amaze and the Ford EcoSport, have left some companies more hopeful. “We have a very good feeling. Every month our contracts for the Amaze is increasing as customers spread good word about the brand,” Jnaneswar Sen, senior VP, marketing & sales at Honda Cars India, said.

Two-wheeler makers, however, are far more enthusiastic of strong performance with rural demand rising after the strong monsoons. “We are hugely optimistic of this festive season. So far the going has been great,” said Pawan Munjal, MD & CEO, Hero MotoCorp. Two-wheeler market leader Hero is launching 10 face-lifted versions of its models for

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