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Festive cheer: 2-wheelers bet on rural demand, but discounts unlikely on cars
In view of a good monsoon and the seventh pay commission that will raise government employees’ salaries by up to 23%, two-wheeler manufacturers are bullish on sales in rural areas this festive season.
In view of a good monsoon and the seventh pay commission that will raise government employees’ salaries by up to 23%, two-wheeler manufacturers are bullish on sales in rural areas this festive season.
About 40% of all two-wheeler sales, which are expected to touch 18 million units in 2016-17, occur in rural areas.
For the last couple of years, sales have fallen or stagnated for most two-wheeler makers.
“We have prepared for this day for four years,” said Yadvinder Singh Guleria, head of sales and marketing at Honda Motorcycles and Scooters India (HMSI).
The firm has created small clusters at the taluka (administrative district of a few villages) level to promote its motorcycles.
It gives government officials a cashback of ₹2,000. There are attractive retail finance schemes, too. The firm also offers an exchange bonus of ₹1,500 at its best-deals outlets.
Apart from HMSI, its erstwhile partner Hero MotoCorp, and TVS Motors are vying to attract more rural buyers. Hero, the country’s largest bike maker, is launching three new motorcycles for the festival season, offering exchange carnivals, and engaged 1,000 sales executives to generate leads. The “Khushiyan har Aangan” campaign is to target influential villagers via cultural activities.
“We offer a special 3.99% interest scheme on all two-wheelers. We also offer an EMI scheme at rural dealerships, wherein you don’t need to pay in cheques,” said Arun Siddharth, vice-president, marketing (motorcycles), TVS Motors.
The company often holds rallies and fairs to promote its products. “We offer special exchange offers to our rural customers in the festive season,” said Siddharth.
Deep discounts unlikely on cars
Since big car makers such as Tata Motors, Hyundai and Maruti Suzuki have seen a surge in car sales, they are unlikely to offer deep discounts this festival season.
For instance, Tata Motors’ car sales doubled during Onam, an important festival in south India which marks the beginning of the festival season in the country, as compared to last year.
“We will see similar demand in West Bengal, with Durga Puja round the corner,” said Vivek Srivatsa, head of marketing (passenger vehicles) at Tata Motors.
The company managed this feat without offering deep discounts. “We are only giving loyalty and exchange bonuses to customers.”
Rakesh Srivastava, head of sales and marketing at Hyundai India, said there was latent demand in the market. “We are already witnessing a sales growth of 25% ... The cash component in discounts has come down,” he said.
The company is offering limited editions of Xcent, Grand i10, and Creta (automatic) petrol with more features at a slightly higher price.
India’s largest manufacturer Maruti Suzuki that is working towards double digit growth is betting on the festival season. Without divulging specifics, a company spokesperson said, “Discounts cannot be decided in isolation as they are impacted by the market situation and competitors’ moves.”
