The month of December, which traditionally brings a lot of goodies to auto dealers in terms of sales, has been a little underwhelming this year so far. The dealers of certain auto brands have seen good uptick in sales, but few others are battling with no growth at all
PANAJI
The automobile industry has had its share of ups and downs this year thanks mostly to demonetisation, which it had to battle with for good part of the first half of 2017, and then haphazard implementation of Goods-and-Services-Tax (GST) in the second half of the year.
By the start of November, the sentiment had turned a bit positive for sure for some auto dealers. December has been a mixed bag for the industry so far with some brands doing quite well, but few others still finding it very difficult to grow.
Typically in the month of December, car manufacturers and dealers offer discounts and package deals (like free accessories) to lure buyers because they prefer to clear that year's stock by December 31. This is because a lot of customers prefer waiting for the next year to buy their preferred automobile.
This December too, quite a few brands have announced offers, but not all of them are seeing customers coming to buy.
Tejasavi Pai, vice-president, Chowgule Industries (dealers of Maruti Suzuki), said, "The market response that we have seen in December so far is not that good compared to last year. There is no growth in unit sales or either enquiries from December 1 to December 14."
Sanjay Parmekar, general manager-sales, Sharayu Toyota, said, "We are seeing a 20% growth in unit sales in December this year compared to December in the previous year. The market is looking positive for us. Currently, we are having few year-end offers as well, which enhance the appeal of product to the customers."
When asked what kind of offers Toyota has for customers, Parmekar replied, "We are offering Rs 40,000 discount on Toyota Etios and Rs 50,000 discount on Toyota Altis. These discounts are valid till December 31."
But, brands are selectively offering discounts, as Parmerkar further informed that Toyota is not offering any discount on its fast moving cars like Fortuner and Innova. Even then, it is commendable that Toyota is managing to grow its unit sales at 20% in December this year.
When asked how GST has impacted the demand for cars, Parmekar replied, "Due to GST, price of only high end cars had gone up, but the price of smaller cars had not changed by much."
Post the implementation of GST on July 1, the car industry has been in fair amount of tizzy. In the initial decision, the GST Council had reduced the tax on luxury cars and sports-utility-vehicles (SUVs). But, later, in September this year, the council increased the cess on mid-sized, luxury and sports-utility-vehicles (SUV) cars.
While car market is still recovering from GST-induced slowdown, two-wheeler market has more or less recovered. The two-wheeler market is doing well mostly due to scooters. The demand of bikes, on the other hand, is not growing at a significant rate.
Paresh Thaly, managing partner, Thaly TVS, said, "There was a minor slowdown in two-wheeler market due to GST. But, now the market is picking up. The scooter unit sales are growing at around 20% in the market, while bikes are showing a growth of 5-6%."
The growth in scooter market is predominantly led by Honda and TVS. Vinay Kunkolienkar from Goa Rajee (dealers of Honda two-wheelers), said, "Honda's two-wheeler sales are growing at around 15% in December, which is not bad. We also need to keep this in mind that December is a festive month and therefore we are working for only 23 days, which may also have an impact on sales."
Kunkolienkar continued, "The brand Honda has an amazing offer for its customers. For all the purchases of Honda two-wheelers, which are being invoiced in December, there will be a lottery. 8 winners of the lottery will get a 100% paid, 2-night & 3-day trip to Dubai, which will include air ticket, food and stay expenses."
The impact of GST was a lot lesser on two-wheelers than on cars. The price of most two-wheelers didn't change considerably post GST implementation. As for cars, the recovery from GST is not uniform either across all brands or across various cars of the same brand. It appears that car dealers will have to wait till 2018 for all of them to see their cash registers ringing at the same time.
