1. Maruti Suzuki, Honda to Hyundai, carmakers eye a cracker of a Diwali after fine Navratri

Maruti Suzuki, Honda to Hyundai, carmakers eye a cracker of a Diwali after fine Navratri

With a bumper Navratri behind them, carmakers are gearing up for a big Diwali. Dealers for the country’s top two players

By: | Mumbai | Updated: October 19, 2016 6:04 PM
Entry segment cars — Hyundai’s Eon and Maruti’s Alto — appear to have been popular picks thanks to big discounts on these products of anywhere between 10% and 12% of the average sale price. (logo) Entry segment cars — Hyundai’s Eon and Maruti’s Alto — appear to have been popular picks thanks to big discounts on these products of anywhere between 10% and 12% of the average sale price. (logo)

With a bumper Navratri behind them, carmakers are gearing up for a big Diwali. Dealers for the country’s top two players — Maruti and Hyundai — told FE retail sales have risen 15-16% during the nine-day-long festival driven by fairly chunky discounts. Channel checks by Bank of America Merrill Lynch reveal retail sales are 10-15% higher for most passenger vehicle makers.

Entry segment cars — Hyundai’s Eon and Maruti’s Alto — appear to have been popular picks thanks to big discounts on these products of anywhere between 10% and 12% of the average sale price. “OEMs are offering aggressive discount schemes of 5-7% of the ASP — insurance and cash discounts — along with exchange offers — 2-5% of the ASP — to push retail volume,” analysts at the brokerage wrote.

Rakesh Srivastava, senior vice-president, sales and marketing, Hyundai Motor India, told FE the sentiment was good. “Footfalls were high during Navratri, resulting in a jump in retail sales of a good 18-20%. We’re expecting the momentum to continue through the month till Diwali and we hope to do better than last year,” Srivastava said.

A Maruti spokesperson confirmed retail sales were 23% higher this Navratri against that in 2015. “Demand in the western and southern markets has been good with even the Alto and Swift having done well,” he said.

The festive season that stretches between September and November is peak period for car sales in the country, accounting for about a third of the year’s total business. There appears to be 8-15% growth in retail demand this time around compared with that during the festive season last year. Much of this is for cars, dealers say, possibly because of attractive discounts and financing schemes. Within two-wheelers, scooters and premium motorcycles are selling more than mass-market motorcycles, although discounts are limited.

“Discounts on entry segment car have touched new highs this festive season,” an analyst from a leading brokerage wrote. He pointed out the segment has been declining in the recent past but volumes were recovering with first-time buyers preferring to buy cars during this time.

Indeed, dealers agree carmakers have gone to great lengths to push smaller models like the Alto and the Wagon R that had been clocking small volumes. Discounts on these cars, they said, averaged as much as R45,000. “We received a lot bookings for entry segment cars during Dussehra,” an executive at a Maruti Suzuki dealership in Delhi said.

To be sure, the bigger cars — premium hatchbacks and compact SUVs — are also in demand. The Baleno and Vitara Brezza from Maruti in particular have seen brisk sales.

“We have seen substantial increase in sales of Elite i20 and Creta compared to last year’s Navratri,” said an executive at the dealership.

Please Wait while comments are loading...

Go to Top