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No cheer for carmakers this festive season

Posted: 2011-11-01 11:28:17

MUMBAI: The festive season has come and gone, but the spark that passenger carmakers were looking forward to was subdued, just as two-wheeler makers rejoiced a strong showing with higher sales backed by festivities.

According to industry observers, the peak of the festive season, which start Navratri to Diwali, usually draws more number of people into the showrooms and the sales see jump of 15-20% more than the average monthly sales, but this time most of passenger carmakers are likely to post flattish or maximum 5-10% growth that too driven by big discounts, offers and new launches.

However two-wheeler makers have posted strong sales this festive season. Bajaj Auto and Honda Motorcycle have posted over 15-20% growth over last festive season, whereas TVS Motor posted a strong showing, but declined to give specific numbers with the board meeting round the corner.

"Our expectation was of a good growth, but this year, the growth will be very nominal. The reasons are very simple, interest rates are far higher, petrol prices are very high, which has dampened the sentiment," said Jnaneswar Sen, Sr VP, marketing and sales, Honda Siel. Experts say, generally during the slow year there is an anticipation of higher growth during the festive season, but this year the conversion to sales was pretty lukewarm. "Overall the festive season was average.

According to the Society of Indian Automobile Manufacturers (SIAM), the period between April to September 2011 saw sales of passenger cars in the domestic market declined by 1.36% to 9,09,283 units from 9,21,812 units in the year-ago period.

The industry body has significantly lowered the passenger car sales growth forecast for the financial year to just about 2-4% due to various issues, including lower output at Maruti Suzuki because of labour issues, and higher lending rates.

Industry was pinning hopes on the festive season for a turnaround, but with sales remaining lukewarm during the season, it will be a big challenge for the industry to match up to last years' numbers, say experts.