Amid cautious optimism, passenger vehicle (PV) makers are preparing to build on the sales momentum they gained in August with a multi-pronged strategy as festival season sets in and the country announces Unlock 4.0.
The August PV wholesale numbers have brought the much-needed cheer to the industry. Market leader Maruti Suzuki saw its domestic monthly sales return to its pre-Covid level of one-lakh-plus after a gap of a few months.
Along with Maruti, most other car brands also saw their volumes grow. Tata Motors, which has a fresh car portfolio with strong safety ratings, has more than doubled (154 per cent growth) its total PV volumes at 18,583 units in August. Hyundai has been reporting sales surge helped by new launches, while Kia Motors continues to see a spurt in volumes of its SUV Seltos.
“We are witnessing demand growth significantly higher than the industry for our refreshed range of cars and SUVs. In Q1FY21, we secured the third rank among other carmakers and garnered a market share of 9.5 per cent (vs 4.8 per cent in FY20) and this momentum has been sustained in Q2FY21 as well,” Vivek Srivatsa, Head, Marketing, Passenger Vehicle Business Unit, Tata Motors, told
“Most carmakers have streamlined their production to almost pre-Covid levels and it’s reflecting in their despatches to dealers. Considering the upcoming festival season and the line-up of new launches, dealers need to prepare and manage their stock levels; hence inventory build-up by dealers is another factor. Strong rural demand is a positive for entry car segment. Also, there was a decent level of pent-up demand in general which is being fulfilled now,” said Suraj Ghosh, Principal Analyst-Powertrain Forecasts, IHS Markit.
Overall, PV sales appeared to have touched 80-90 per cent of pre-Covid levels. Industry analysts said sales enquiries began rising during the second half of August with the onset of festivities (Onam, Ganesh Chaturthi) across the country.
With August numbers infusing confidence and Unlock 4.0 coming into effect, PV makers are optimistic about the upcoming festival season.
While every company is betting on the shift towards personal mobility due to Covid-19 social distancing norms, other factors such as strong rural and semi-urban demand, an extension of pent-up demand and new car launches are expected to support demand revival.
Strong rural economy
Ghosh stated the strong rural economy already has an impact on sales after the bumper yield and the good numbers for carmakers may continue, if the next crop season is favourable.
“Smaller towns and rural markets (Tier 2 and Tier 3) are pacing up the demand as compared to metros/Tier 1 towns. At Tata Motors, we are seeing more active buyers from smaller cities and, therefore, our strategy too is focussed accordingly,” said Srivatsa.
Companies are expected to use multiple sales promotion and discount activities to capture and convert the new queries, while new launches will be used to sustain enthusiasm among prospective car buyers. For instance, new entrant Kia Motors’ upcoming compact SUV Sonet has created a lot of buzz in the market.
Tata Motors launched an elaborate campaign across Kerala for Onam. This will now be followed by campaigns for other festivals across the country and in respective States, where it plans to adopt a more regional approach for local customers this time.
“With the easing of restrictions, gradual resumption of economic activity and an array of products to choose from, we anticipate that the sentiments will definitely be positive in the coming months,” said Srivatsa.