Festive boom: Auto companies readying plans to offset sluggish rural demand

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New Delhi | Published: September 3, 2015 6:30:59 AM

Though the lower-than-expected monsoons remain a concern, the country’s leading automobile manufacturers expect new launches, lower oil prices and a possible cut in interest rates to drive up demand by nearly a fifth during the upcoming festive season.

auto companiesIn the two-wheeler segment, Hero MotoCorp and rival Honda Motorcycle and Scooter India (HMSI) are lining up new models to bring back the wary buyer. (Reuters)

Though the lower-than-expected monsoons remain a concern, the country’s leading automobile manufacturers expect new launches, lower oil prices and a possible cut in interest rates to drive up demand by nearly a fifth during the upcoming festive season.

Rakesh Srivastava, senior VP (marketing & sales), Hyundai Motor India said, “We expect that this year’s festival season is going to be better than last few years as there is latent demand in the market. A possible cut in interest rates, lower fuel prices and improved consumer sentiments will drive up demand.”

The domestic passenger vehicle industry is expected to grow in the range of 15 to 17 per cent during the festive season, Srivastava added. With new models sports utility vehicle Creta, premium hatch Elite i20 and crossover i20 Active, Hyundai itself is looking at clocking 20 per cent growth in the festive period over volumes registered in the corresponding period last year.

The country’s largest car maker Maruti Suzuki is working on expanding its reach to off-set any possible adverse effects of the weak monsoons in the coming months. RS Kalsi, executive director (marketing & sales) said the company plans to reach out to 1.5 lakh villages in FY16 against 1.25 lakh villages last fiscal. “We are looking to expand our reach in the rural areas. It would help us compensate for slowing demand from these areas. We would maintain double-digit growth in the coming months”, informed Kalsi. The share of first time buyers has risen to 44 per cent in FY16  against around 37 per cent last year indicating a revival in consumer sentiments at the entry-level, he said.

Tata Motors executive director, Commercial Vehicles, Ravi Pisharody, too, is optimistic of an upturn in the months ahead: “The growth is not so much dependent on agriculture only, there are expectations that manufacturing and mining are on their way up and the overall economy also….The other thing is that monsoon has not been a disaster unlike few years ago. It has been fairly good for half of the country.” Pisharody added sales in the festive season would recover, specially for the smaller vehicles.

In the two-wheeler segment, Hero MotoCorp and rival Honda Motorcycle and Scooter India (HMSI) are lining up new models to bring back the wary buyer. Pawan Munjal, chairman and managing director, Hero MotoCorp said, “ Starting this month we will start stocking up for the festive season. Whatever the environment, we are very hopeful and bullish about the festive season. We are looking forward to it.” The company is scheduled to launch two new scooters to cash in on the expected rise in demand during the festive months.

Commenting on the monsoon season, Munjal said: “Some areas had good rainfall while in South and West they did not have good monsoon. We are well spread out through the country in terms of sales, and will balance out the impact geographically.”

Hero MotoCorp, EBR to renew ties

New Delhi: Hero MotoCorp has started the process of bringing back to India the product development of models it was engaged in with Eric Buell Racing (EBR). EBR has recently filed for bankruptcy. Hero MotoCorp and the US-based EBR were in the process of developing a 250cc bike and a scooter. ENS

M&M to sell Peugeot scooters in N Africa

New Delhi: Mahindra & Mahindra (M&M)is working to expand presence of Peugeot Motocycles, in which it had acquired a majority stake, beyond Europe by entering markets like North Africa and Vietnam. The group is not planning to launch Peugeot scooters in India in the immediate future but may do so in future if it is able to bring down the product cost.  ENS

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