The Indian automobile industry entered the festive season, maintaining a low key status as various Indian auto giants experienced sluggish sales despite launching new cars in India. Several car dealers have reported a low demand for vehicles even as the festive season has commenced. India's premium car makers like Maruti Suzuki, Tata and Hyundai were expecting a major sales boost during the season, however, things did not head as planned.
A Honda dealer from Mumbai commenting about the car sales said, “It has been slow. The market is down despite new launches and price cuts in Honda City and Jazz. There have been new launches in the C segment where City rides.” Furthermore, the Mumbai based car dealer also added, “With more choices in hand, customers are getting diverted. That’s why we are offering around Rs. 85,000 additional cash discount on the City.”
Car dealers were also hoping an increase in sales on Dusshera, which is considered as the most auspicious day for purchase of new vehicles. On the bright side, however, car dealers reported that footfalls and enquiries were satisfactory. A Maruti dealer based in Mumbai mentioned that during the previous year, over 100 vehicles were booked on Dusshera, while this year mere 12 to 13 bookings were received.
Experts suggest that the Indian car market leader, Maruti Suzuki will have to overcome major obstacles in order to match up with the last year's October sales. An executive at Maruti Suzuki India Limited stated that, “Last year we sold 107,000 units in October. Though we are very positive about this season, reaching last year’s numbers will be difficult. Dealer inventory is also increasing.”
Seva Automotive, a Maruti dealer, based in Maharashtra expressed concerns regarding Maruti car sales but expected a favourable response, similar to previous year, with the delivery of over 250 cars on Dusshera. Sanjeev Bafna of Seva Automotive said, “the festive season in not as buoyant as we expected. There are inquiries, but the conversions are slow.”
As a matter of fact, Tata cars have enjoyed an edge over other brands due to the company's buyer-friendly finance schemes. Tata Motors dealer, Santosh Desai, Concorde Motors appreciated Tata's finance schemes saying that, “This has led to a good number of bookings.”
Automotive industry experts say that several new launches from various car makers will play an important role in boosting the sales during the festive month. Especially for Maruti Suzuki, launch of the new Swift is expected to bring back its continuously diminishing market value, owing to the recent labour unrest within the organisation. Moreover, Hyundai's upcoming small car Eon, the bookings for which have recently started, is expected to intensify the competition in the hatchback market, locking horns with Maruti Alto. Other recent launches include Mahindra XUV 500, Honda Brio and Nissan Sunny.
Kasturi Lal, Managing Director of Wasan Motors, said, “New launches always help in triggering the demand. But that’s not leading to sales growth. The new cars are only eating away the share of the existing products. Demand has been affected by the slowdown for the past 7-8 months.”
