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However, sales personnel inside the attractively decorated makeshift pandal, where 25-30 bikes and scooters are parked under glitzy lights, outnumber prospective buyers by 3:1. Eye-catching banners announcing cheaper loans and exchange offers do not excite buyers anymore.
Similar scenes are witnessed in other parts of the country with several dealers complaining of lacklustre enthusiasm amongst buyers who are drawn to car and two-wheeler showrooms only on the lure of discounts.
Although sales for Diwali period (annually the peak-buying period) for leading companies such as Maruti Suzuki and Hero MotoCorp fare better than that in 2012, it barely manages to scrap through the previous Diwali's record. Sundeep Bafna, managing director of Fort Point Automotive, said, “This Diwali is only slightly better than last year's. As a dealer, the five to six per cent growth in sales is anytime better than the free fall we saw in earlier months. Last year, we sold 620-odd Maruti cars; this year, we hope to sell 650 units.” Fort Point has a Hero Motocorp dealership as well. With discounts hitting their peaks (ranging from five per cent to 15 per cent of the cost of the vehicle), automotive companies are struggling to draw the festive crowds and manage inventory levels running to three to five weeks, putting further pressure on dealers. For instance, General Motors is offering record discounts ranging from Rs 25,000 to Rs 85,000 across its models to push festive sales.
According to a top industry executive, vehicle (passenger and commercial) sales in the domestic market have declined by 10.9 per cent to around 277,000 units till October 29 this year, compared to about 310,800 vehicles sold during the corresponding period last year. Sales of passenger cars have declined by 4.6 per cent to 162,000 units, compared to October 2012. “There is an upward movement. Sequentially over last month, sales are expected to increase by 15-20 per cent due to the ongoing festive season. But market continues to be sluggish. When compared with last year, there may be a decline on five to 10 per cent in the industry in October,” concurred P Balendran, vice-president (corporate affairs) at General Motors India.
Pravin Shah, chief executive, Mahindra & Mahindra, said: “Diwali sales are better than, say, July or August, but the festive season is not that one used to see in the past. Situation of troubled time continues. Demand is lesser compared to last year’s Diwali. The repo rate hike might also make a sentimental impact on the buyer.” “The first wave of festival was good, sales surged by five to eight per cent during Navratri. Footfalls and bookings have been decent, but we have five critical days to go,” said Mayank Pareek, chief operating officer (sales and marketing) at Maruti Suzuki India. The company has built inventory of up to five weeks, which it expects to come down to the levels of four weeks or less by November 1.
While two-wheeler demand has gained some traction in the rural markets, thanks to the bountiful monsoon, the gain is squared off by the fall in urban centres. Hero MotoCorp, the country's largest two-wheeler manufacturer said it will cross its own previous year's Oct-Nov sales this year but will conclude on a flat note.
In a conference call Anil Dua, senior vice-president (sales & marketing), Hero MotoCorp said, "Like to like comparison it is not very positive, it is flattish. A lot depends on Dhanteras and Diwali go, last year was record time. We are maintaining a high level of inventory. Last Oct-Nov period we sold 1.1 million units this year we should exceed that".
Hero's rival Pune-based Bajaj Auto, which a few two weeks ago launched a new Discover bike, too feel that the festive demand is lacking punch. "Early indications are showing a flat retail trend over last year", said K Srinivas, president (motorcycle business), Bajaj Auto.
Thanks to a handful of models such as Hyundai's Grand i10, Maruti Suzuki Stingray, Honda Amaze and Chevrolet Enjoy, all of which are a few months old in the market, there have been some uptick in consumer enquiries.
"For Hyundai, the Grand has been a big pull and has had a positive impact on enquiries as well as in improving conversion rates of other products", said Rakesh Srivastava, senior vice-president (sales & marketing), Hyundai Motor India.
Jnaneswar Sen, senior vice-president (sales & marketing), Honda Cars India, said, “We are receiving good footfalls in our showrooms because of the Amaze. There is a waiting of 10 weeks on the vehicle. We would have liked to sell more but our monthly capacity is currently limited at around 10,000 units."
