Maruti pins hopes on festive season for demand revival
The country's largest car maker Maruti Suzuki India is pinning hopes on the festive season for a turn around in the auto industry irrespective of government help forthcoming or not, according to a senior company official.
With some of the factors responsible for the slowdown in auto sales such as concern over monsoon and elections behind, the company is hopeful that revival in demand specially from rural markets and peak discounts along with new model launches will play a crucial role converting inquiries into real purchases.
"We are not going to speculate on whether or not the government will provide some extra relief to the industry ... how much or how little it would be or when, now or later, will it be...What we are trying to do is to be more constructive in our approach," Maruti Suzuki India Executive Director, Marketing and Sales Shashank Srivastava told PTI in an interview here.
The auto industry has been asking the government for reduction of GST on automobiles to 18 per cent from 28 per cent as part of a stimulus package.
Srivastava said instead of waiting for government steps, the company is focusing on what it can do to revive demand by bringing new models and also providing attractive offers to consumers.
"We have launched the XL6 and we will continue to introduce new models. We will have another model coming up later," he said.
Stating that the company is focusing on retail sales, Srivastava said, "We have focused on consumer offers which are at a peak. This is the best time to buy."
Discounts in August will be slightly higher than what MSI had in the first quarter of the fiscal, he added without elaborating.
Moreover, he said, "We are advertising with the same vigour as before."
With all those actions, he said, "We are hopeful that this festival season it will turn around."
Elaborating on why MSI is hopeful of a turn around this festive season, Srivastava said some uncertainty like monsoon and election that were also responsible for sales drop earlier in the year have gone.
Also, the government has sought to address to an extent the liquidity issues associated with NBFCs by allowing banks to lend more to these financial institutions in the budget, he added.
Moreover, Srivastava said, "We are also confident because of the number of inquiries at showrooms."
The key is to convert those inquiries into purchases, he added.
When asked if there's light at the end of the tunnel for the auto industry, Srivastava said, "MSI as a company, we are very optimistic that there is this light. How far is it is the question. It is better to answer that, a better estimate after we see this festive season, end of October."
This festive season is very critical and the industry is looking forward to it, he said.
Automobile sales in India witnessed its sharpest decline in nearly 19 years in July, dropping 18.71 per cent, rendering almost 15,000 workers jobless over the past two-three months as the sector reels under a prolonged slump.
Passenger vehicle sales slumped by 30.98 per cent to 2,00,790 units as compared with 2,90,931 units in the same month last year. It was the ninth month of consecutive decline.
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