WILL FESTIVALS LIGHT UP CAR SALES THIS YEAR?

Festivals and marriages are the only time when people generously loosen their purse strings. All the pent up desires break barriers and there is usually a flood of demand for all and sundry – right from cosmetics, clothes, white goods, buying a new house, home décor , cars and more. So naturally, it is the time when companies also make the most of this ‘pent up demand’ and help people spend faster wit enticing discounts and sales.

With the beginning of September, the “official” festive period for most white goods and realty companies has started – the time when they make the most. Especially car companies; for them it is moolah time as festivals is when we see people flocking to buy vehicles – be it car or two-wheelers.

Thus it comes as no surprise to know that there is an array of new launches planned. Over the next four months, until December, not 4 or 5 but 26 new car launches have been planned. Last year, during the same time frame, 17 new launches happened. Clearly, this year, car companies expect more fervor to the festivals.

After the upgraded Ciaz in August, Maruti is launching an upgraded version of Wagon-R in November and before that the face-lifted Ertiga. No new cars, only upgraded versions this season for Maruti.

Ford has two launches  in September – Figo and Figo Aspire. Tata Motors has it Tiago scheduled for October. Mahindra’s Marazzo, S201 and G4 Rexton are slated for September. Nissan too has two for this month – Datsun Go and Datsun Go+. Luxury car makers, Mercedes Benz and Porsche too have one car each planned for this month.

Maximum launches will happen this month as Ganesh Chaturthi is considered to be an auspicious accession to buy a new car and within fifteen days Navratri follows and then the grand finale – Diwali. Thus launches now enable people to make an informed choice ahead of Diwali or Navratri.

Bajaj Auto numbers for August have been very robust but the passenger cars segment reported a decline largely. Maruti showed a 3% decline in domestic sales and Hyundai Motor also reported a 3% fall. M&M showed a 2% rise in August sales. Tata Motors did the best with a 28% rise in August sales and Toyota showed a 17% increase. Though passenger cars showed a mixed trend, two-wheelers and commercial vehicles showed a very good growth.

People might have digested the price in fuel costs but with cost of the vehicles have also started going up from 1^st Sept in most companies, one has to wait and watch if that is something which consumers would be able to afford.

The rising interest rates is another thing to watch out for as majority of the cars are today bought on loans. Car dealers too are saying that enquiries have actually started coming down. We will most certainly have the lower base effect showing us a better picture this year but the bottomline is that this festival season could see moderate sales; the frenzy of car launches might not match with the sales.