The Hindu Business Line : Marketing schemes of car makers don’t make the cut this year

Car makers are finding that marketing schemes — the magic wand that could turn around their sales last year — are proving to be of limited benefit this year.

The slowdown in auto sales is keeping customers at bay despite the gamut of offers that automakers and financiers are providing.

Take Maruti Suzuki’s vendor scheme that helped the company sell 4,000 units last year; it had only half the impact this year. Maruti’s vendor participation programme is an initiative that allows employees of the company’s suppliers to purchase its cars at a subsidised interest rate of 8 per cent.

In case the supplier company offers further incentive, then the interest rate gets further reduced by 1 or 1.5 percentage point , thereby taking it down to as low as 6 per cent when the prevailing market rates stand at around 13-15 per cent.

“This July-August was the second year of our vendor partnership scheme. We sold about 2,000 units,” said a top official from Maruti. Last year, the company sold 4,000 units.

Conversion rates

Similarly, Hyundai too is finding that some of the marketing campaigns initiated by the company last year are translating into lower conversion rates.

“We are finding that while the turn out in terms of participation is encouraging, the conversion is taking a much longer time now with high interest rates and inflation,” said a Hyundai marketing official.

Earlier Hyundai exported around 45 per cent of its cars and sold the remaining in the domestic market. But now, the company’s sales within the country and outside are more or less equal.

Niche marketing

General Motors, which sells models such as Chevrolet Spark, Aveo, and Optra, says with the market being sluggish, it was looking at various alternatives apart from discounts to entice customers.

“The market is sluggish. And not always (do) discounts lure buyers. So we have increased our niche marketing campaigns,” said Mr Ankush Arora, General Manager, Marketing.

He said that the company has now started a Spark rural float to promote awareness and gone in for digital marketing efforts in certain segments, targeting a niche customer base.

Car sales in the country grew marginally by 5 per cent during April-August this year.

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