Usually, auto makers really look forward to the festive season in India as it is their best chance to boost sales and launch new models. However, this time around, the prevalent scenarios have dampened the spirits of companies, who are apprehensive about the potential of this festive season helping their cause. Consumer sentiment throughout the country is quite low and as a result, the demand for cars has been hit badly. This has further resulted in loss of revenue and drop in numbers for auto makers throughout the country. Key representatives from a number of car companies have expressed the kind of toughness that is prevailing in the market.
Pawan Goenka, President for Automotive and Farm Equipment Sectors at Mahindra & Mahindra, in a recent interview, elaborated the reasons why this year's festive season will not be as bright as last year's. "The market conditions continue to be extremely tough. Although sales during the festive season will be definitely higher than what we have seen in July and August, it will be less than what we had witnessed in last year's festive season," he was quoted as saying.
According to industry experts and analysts, the festive season, under normal circumstances, has the potential to return high growth rates. However, this time around, the projected growth rate could be half of what is usually expected, culminating into yet another fall in sales this year. Confirming this premise, Sandeep Singh, Deputy Managing Director and Chief Operating Officer for Marketing and Commercial at Toyota Kirloskar Motor, said, "Normally you see 20 per cent growth during the festival time but this year we are not looking at that. We expect somewhere around 8-10 per cent growth in volume as compared to previous months."
Industry experts believe that the overall sales of the automobile industry are going to decline drastically during this calendar year. Tata Motors, the country's largest automobile manufacturer, has been hit badly and its performance in the passenger car segment has dipped considerably. In addition, the car maker does not see any kind of drastic change in the demand during the upcoming festive season. The Managing Director of Tata Motors, Karl Slym, conveyed this sentiment in a recent interview. Elaborating on the upcoming festive season and the condition of the auto industry, he said, "If you look at the trends of our industry, then unfortunately, 2012-13 was less than 2011-12 and 2013-14 is looking less than 2012-13. We expect to see a boom as we have always seen in this country as far festival season is concerned, but looking at the trends it will be lesser than last year."
Analysts have said that the sentiments expressed by executives from all these companies are completely justified. The past few months have been extremely torrid as the value of the rupee has fallen consistently, fuel rates have soared and reluctance of buyers has increased. Despite the introduction of new models and car makers providing lucrative deals, sales have failed to show any kind of sizeable progress. However, some companies are still optimistic about the festive season bringing about a change. Lowell Paddock, President and Managing Director of General Motors India, said, "Last year we were equally optimistic...I am certainly optimistic that we will see some demand coming in the festive season."
