Diwali 2017: Auto brands cash in on festive fever

Festivals are a time to celebrate and most brands use the occasion to present the best they have to consumers. India’s automotive market is no exception to the rule. Riding high on positive sentiment, auto brands are going all out to woo buyers this Diwali.

As such the festive season contributes 30 per cent to annual sales of auto majors. While discounts, freebies and gold coins are not new marketing tactics, it is the amount of benefits that are striking this year.

Auto industry sources say that discount schemes this Diwali make up 15-20 per cent of the cost of the car, clearly a substantial amount by any standard.

The country’s largest car maker Maruti Suzuki, for instance, is offering benefits worth Rs 40,000 on brands such as Alto, Celerio and Swift. The country’s second largest car maker Hyundai, meanwhile, has even steeper discounts of Rs 80,000-90,000 on the Grand i10.

Hyundai’s senior general manager and group head, marketing Puneet Anand says the 2017 festive season is the best in three years for the auto market. He says the month of October could see double-digit sales growth.

Experts say that car makers use the festive season to exhaust current inventory before they can launch new models. Though this is a practice followed commonly in the month of December, it is interesting, say experts, that car makers have opted to use this lever in October, a result of the underlying festive demand this year.

Car firms, for the record, saw double-digit year-on-year sales growth in September despite an increase in cess on bigger cars and sports utility vehicles (SUVs) in July due to the Goods and Services Tax.

Players such as Maruti Suzuki, Hyundai, Honda and Tata Motors, which together have a little over two-thirds of the car market, said that a festive pull in demand helped them clock good numbers in September. Most of them say that the month of October will also see good growth on the back of this festive demand, goading them to give good discounts.

One player, however, which has gone the extra mile to woo consumers this festive season is Japanese auto major Nissan. Sources say the company has used the period to improve penetration of its cars by offering hefty cashbacks on select models between October 7 and 10, the first four days of its Diwali Carnival Festival. This was a 100-hour, non-stop event held at all Nissan and Datsun dealerships, receiving good response. The success of the festival prompted Nissan to go in for a second round, held on October 14 and 15.
“The 2017 festive season is the best in three years for the auto market. October may also see double-digit sales growth”

Puneet anand, senior general manager and group head, marketing, Hyundai Motor India

But if this is one aspect of the consumer schemes on offer by auto majors this Diwali, there is another side to it as well. Auto dealers are running schemes of their own to lure consumers. Some of them are unusual.

In Tamil Nadu, for instance, a Hero Motocorp dealer chose to give a goat for every two-wheeler sold in a bid to attract buyers. The scheme got as many as 100 bookings in a day forcing the dealer Gayatri Motors to call off the offer as it was unable to handle the flood of orders that came its way.

Yadvinder Singh Guleria, senior vice-president, sales & marketing, Honda Motorcycle & Scooter India, said the company was seeing good growth this Diwali over last year, which he attributes to pent-up demand.

While Honda reported sales decline of 10-12 per cent during the 2016 festive season, it is seeing double-digit growth now, Guleria said.

The company also added as many as 300 retail outlets, mainly in rural areas, to tap into this festive demand for bikes and came out with new schemes and offers including a cash-back of Rs 2,000 for government employees.

Aniruddha Haldar, vice president (marketing), commuter motorcycles, scooters and corporate brand, TVS Motor Company, meanwhile, said the company had refreshed its entire product portfolio in keeping with market dynamics and had also created a slew of marketing campaigns and initiatives to maximise impact during the festive season.

Tractor and sports utility vehicle maker Mahindra & Mahindra, in the interim, is offering discounts worth Rs 22,000 to Rs 2.43 lakh on its products. So are Volkswagen and Fiat, which are said to be offering steep discounts on models such as Vento (Volkswagen) Urban Cross (Fiat) and Abarth Punto (Fiat) among other variants.

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel