Maruti Suzuki to Hyundai, carmakers hope for a cracker of a Diwali even as NBFC suffer fund crunch

Confusion over new insurance policy premiums, tightening of financing to the end-consumers by non-banking financial institutions (NBFCs) in backdrop of crisis at IL&FS and high fuel prices are some of the reasons that led to drop in bookings.

An executive of a Mumbai-based showroom of luxury car maker BMW said this festive season 6 series GT and X 1 cars are much in demand though some of the older models are still getting a second look.

Mumbai: Vehicle makers are hoping for a bright Diwali after NBFC crisis, fuel prices and confusion over insurance premiums hit sales during Dussehra. They are pinning hopes on new launches and upgrades to drive sales during Diwali, which accounts for around 75% of total festive sales annually.

Confusion over new insurance policy premiums, tightening of financing to the end-consumers by non-banking financial institutions (NBFCs) in backdrop of crisis at IL&FS and high fuel prices are some of the reasons that led to drop in bookings.

A sales executive at one of Mahindra & Mahindra’s (M&M) showrooms in suburban Mumbai told DNA Money that though enquiries were higher this year over the last year, sales were down.

The executive said his showroom delivered just 38 cars while it counted around 50 units last year during Dushera. Importantly, around 65-70% of the total deliveries were newly launched Marazzo. “Some of the deals could not get completed due to financing issues. However, we still hope the sales to pick up during Diwali,” said the executive. M&M said that Marazzo has managed to garner over 10,000 bookings since its launch in September.

Market leader Maruti Suzuki, which sells one in every two cars sold in India, saw its vehicles like Brezza, Vitara and S-Cross continuing to generate interest among the consumers during the ongoing festival season.

An executive of a Mumbai-based showroom of luxury car maker BMW said this festive season 6 series GT and X 1 cars are much in demand though some of the older models are still getting a second look. The showroom could manage to book just around half of sales as compared to last year’s 34 units.

“We have already started getting enquiries for Diwali discounts” the executive said.

The situation was similar in the two-wheeler segment.

K N Radhakrishnan, CEO at TVS Motor, who has been appointed as whole-time director, on Tuesday said that the confusion over new insurance rules and increasing fuel prices impacted the sales, especially in the entry-level segment. The impact has been more significant in the rural and semi-urban areas. Radhakrishnan said that issues related to insurance are well settled now, and demand will pick up for the rest of the festival season.

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“Major part of the festive season is yet to come,” said Radhakrishnan on a conference call.

However, Sridhar V, partner, Grant Thornton India LLP, said it’s a “wait-and-a-watch situation” for the industry and it is too early to say how the sales will turn out during Diwali.

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