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

livemint.com:

Indian automakers are gearing up for a crucial test of market sentiment this festive season as they seek to reverse a slowdown in demand that has hurt sales of all types of vehicles. 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.

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. 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.