Holiday Season: Bad news for the car and bike industry! Inferior sales this year

The collapse of stock markets is one of the main causes of poor consumer confidence, which has seriously affected urban demand. (Representation photo: Reuters)

According to the very moderate demand for cars and motorcycles, it will be a dull Diwali. According to the dealers, the demand is almost zero, sales during the Navratri period having decreased by 10 to 20%. The remarks of RC Bhargava, president of Maruti Suzuki India, at the end of last week clearly show how the feeling is moderate. "The market does not seem to show the kind of dynamism expected during the festival season. The feeling is not positive, "Bhargava said.

Illustration: Shyam kumar prasad

One of the main reasons for the low sentiment of consumers is the fall of stock markets and its impact on urban demand.

Puneet Anand, Hyundai India, general manager at GM (marketing), estimates that car sales may well be lower than last season's festivals. "Car sales may not be as good as the last Diwali from the industry's point of view," Anand told FE.

In the south, the management of TVS Motors was just as cautious. Until now, sales had been very modest during the holiday season. Hero MotoCorp management also said that the first days of the holiday season had grown flat.

"The atmosphere is probably the worst for many years, at least five years. The last time we saw a similar situation was in 2013, when the economy was not doing well, said Ashish Kale, president of the Federation of Automobile Dealers Associations (Fada).

"It looks like another month," he said, adding that bookings did not translate into sales.

Rajiv Bajaj, General Manager of Bajaj Auto, told TV channel last week, the growth of two-wheelers was clearly slowing down even as the holiday season began. Bajaj said that there was talk of a decline in demand, some players having to record lower volumes than usual, although his company, he says, is doing well.

Sales of motorcycles and cars were affected by the new third. insurance standards and also rising fuel prices. In addition, the shortage of cash, some brokers pointed out, had led to higher loan costs.

In addition, the collapse of the stock markets led to a loss of investor wealth, which heightened the gloom.
A Honda dealer based in central Mumbai said demand was down by around 15 to 20 percent. "A customer who wants to buy CB Shine suddenly finds that the price has gone from 66,000 to 71,000 rupees," he said, adding that customers were delaying their purchases. Another dealer managing a two-wheel multibrand showroom said demand was down about 25-30%. Another dealer in West Delhi, selling bikes from the Hero stable, confirmed that the request was a little slow.

Industry experts say that usually 35-40% of festival season sales take place during the Navratri festival and the remaining 60-65% during Diwali. Retail sales of cars and motorcycles are estimated to have increased by 15% during the 2017 festival season.

While in general, rural demand is well above urban demand, the farm segment agricultural is not doing well. In the second quarter of year 19, rural sales in Maruti had increased by 13% over the previous year while the growth of urban markets was stable.
A Nagpur-based car dealership pointed out that demand could increase once the crop arrives and that it will be sold. much would depend on the remuneration of farmers, artiyas and other intermediaries. In addition, the growth of rural wages is slowing down.

• Kritika Arora & Arun Nayal