New Delhi: The Consumer who has been ruling the markets for over a decade and a half, seems to be losing some of his clout. With banks and finance companies like ICICI and Citibank closing down their consumer finance arms, zero percent interest loans for white goods may be a thing of the past. Many white goods retailers are alreadybooking lower sales… up to 30% in stand alone shops and 6-10% in multibrand showrooms. However, manufacturers say they are yet to feel a negative impact, as it is a small component of over all sales. Says V. Ramachandran, director Sales & Marketing at LG, ”Sales through such schemes would probably be in the range of 8-12%. Over all sales of consumer finance are likely to be larger.”
But there is no denying that manufacturers are a worried lot. LG is in talks with financiers for special schemes for its products. It also wants them to have a greater presence in smaller cities. Samsung is looking for tie-ups with banks for special schemes through credit cards. While credit cards maybe popular with banks, manufacturers are wary.
“For us as a manufacturer, when we support consumer finance, there is greater transparency. We know that the subsidy that we provide is going exactly against the purchase of our brand,” he adds. The consumer durables sector recorded a negative growth of 2% last fiscal versus a positive 3.8% last year. And with inflation at an all-time high and rising interest rates, the first signs of consumer spending slowdown are here.