Automakers in India expect demand to pick up in festive season

Leading automakers Maruti Suzuki India (MSI), Honda and Tata Motors expect sales to pick up during the festive season, although there is uncertainty about their performance this year on account of Covid-19 pandemic.

The country's largest carmaker MSI has seen sales improve month-on-month from May till July, and expects offtake to remain robust during August as well.

The auto major, however, feels that the festive season demand would depend on the Covid-19 situation.

"We are relieved that sales bounce back has happened but we will have to wait and watch because a lot of this demand will be pent-up demand and we will have to see how steady the demand would turn out to be," MSI Executive Director Sales and Marketing Shashank Srivastava told PTI in an interview, reported Livemint.

"I think it will depend on the economy and Covid scenario because car buying is a discretionary purchase and requires positive sentiment," Srivastava added.

If Covid-19 situation improves, it would lead to improved sales and if somehow the scenario deteriorates then the sales would also be impacted, he noted.

Srivastava said the festive season generally brings good sales as people are more inclined towards spending during the period.

"That is why demand is more in festive season. So in any year festive season is one of the better month for sales, but however this year we would expect festive season to be good but then we are very careful in making this conclusion as you can also have negative sentiment coming from Covid-19," Srivastava said.

So coronavirus situation will predominate as far as sentiment is concerned this festive season, and therefore it is little bit uncertain what will happen during the period, he noted.

In any case, the company is ramping up the production to cater to demand while at the same time also strengthening finance options and digital medium to help customers in buying process, Srivastava said.

The carmaker has seen steady demand emanating from rural areas in the last few months and expects the trend to continue even in the rest of the fiscal.

"Rural sales now account for 40 per cent of the total sales. In fact we are now also witnessing revival in urban centres as well," Srivastava said.

Similarly, Honda Cars India Ltd (HCIL) Senior Vice President and Director-Marketing & Sales Rajesh Goel said the company is optimistic about the upcoming festive period and expects demand to improve, further supporting retail sales.

"Ever since lockdown opened up, we have been focusing on new launches and refreshments in existing models including all new City, WR-V and Jazz to be ready for the festive season."

"All these new models have helped us create fresh excitement in the market and evoke customer interest. The response to our launches has been very encouraging and we hope this trend will grow in the coming months," he said.

Goel said though the restrictions have been eased, Covid-19 cases are constantly on a rise and there are mini-lockdowns and weekend restrictions being imposed in many parts of the country.

"We have to continue with our efforts to overcome this challenge and adapt to the start-stop method of operations. Currently, about 95 per cent of our dealerships are open," he noted.

Looking at the positives, people seem to have reconciled to the fact that this Covid situation is here for some time, so they are getting back to work with utmost care, Goel said.

There is an inclination towards personal mobility amidst health, safety and social distancing concerns, he noted, adding that consumers are increasingly becoming comfortable with online sales platforms for booking cars.

Smaller towns and rural markets will perform better as buyer sentiments in these demographics are positive and there is lesser impact of Covid-19, Goel said.

Good rabi crop production and favourable monsoon will surely drive the demand in these regions, he added.

On company's preparations for the festive season, Goel said the carmaker is already in the process of ramping up production and hopes to reach 100 per cent of pre-Covid level by September.