Automakers gear up for a crucial test of sentiment this festive season

The extended monsoon season dampened consumer sentiment in the rural region, impacting two-wheeler sales, said Yogesh Mathur, director, sales and marketing, Honda Motorcycle & Scooter India (HMSI). “The festival season will be crucial for the two-wheeler market." 

Apart from a prolonged monsoon, low consumer appetite for spending and rising vehicle costs also contributed to a slump in both entry-level and premium vehicle sales. Companies are sitting on high inventory levels, prompting Tata Motors Ltd. and Mahindra & Mahindra Ltd. to offer discounts. 

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The previous months had failed to meet the industry’s growth expectations, making October a pivotal month for gauging a potential boost in sales, said Mathur at the recent Society of Indian Automobile Manufacturers (SIAM) convention. If the festive season proves successful, it could boost domestic sales by around 10% for the ongoing fiscal, he said.  

'Everything depends on October'

However, this year’s auspicious period is condensed into a single month, which adds to the uncertainty. “Everything depends on October," he said. “If October does not perform well, it will definitely have an (adverse) impact." 

The country’s largest carmaker Maruti Suzuki India Ltd said Onam, which marks the onset of the festive season in Kerala, fell in September this year compared to August last year, and the company recorded 10% on year increase in bookings. Similarly, it saw a 10% growth in deliveries in key markets during Ganesh Chaturthi.  

“We are hopeful that this positive traction will continue through the festive season," said Partho Banerjee, senior executive director, marketing and sales at Maruti Suzuki.  

Also Read: Auto sales remain mixed in August: Passenger Vehicles, CV volumes drop, Electric two-wheelers see strong growth

The company aims to maintain its pricing strategy without raising discounts further, he said. 

Other major automakers, including Tata Motors, are adopting a more aggressive stance.  The company has significantly increased discounts across its range of vehicles, including both electric vehicle (EV) and internal combustion engine (ICE) models to stimulate demand in a sluggish market. 

Commercial vehicle makers also anticipate a potential uptick in demand during the festive season.  

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While the festive season is just the beginning, there is hope for improved demand over the next few months, Satyakam Arya, chief executive officer of Daimler India Commercial Vehicles, told Mint. “The full impact of the festive season will become clearer by October. We definitely saw better sentiment (the beginning of this festive season) than in the past year, with customers coming forward and closing deals they had postponed, but it wasn’t much better compared to August."