India Car Market Growth

April 2012 sales (Vis-a-Vis March) seem to have applied brakes to the euphoric Indian car story. In light of this sudden brakes.

Growth Drivers of Indian Car Market

In Light of low April 2012 we at www.ecardlr.com thought of presenting growth drivers for cars sales in Indian even at the risk of being proven wrong. So here’s our list; 

1)       New Cars : Nothing drives car sales growth more than a new launch. A fact which is not only obvious from the number of visits an upcoming car section of an auto portal receives but also from the bumper numbers the new launches get. One does not have to go back into history just recall the New Swift 2011,  New Dzire, iGen i20 etc. Other interesting angle which confirms this is stagnating sales of old models from any manufacturer’s kitty.

2)      Facelifts : Cars like human being go through a mid life crisis and therefore needs some excitement around them. Car manufacturers use facelifts to extend the models life by recreating the excitement around an old model through facelifts. They normally involve cosmetic changes like changes in front Bumper, headlamps, ORVM’s door inserts, decals, rear chrome inserts, new two tone of beige interiors, changes in dash and door handles etc.

3)      Sentiments: Sentiments drives the Indian car market and the biggest sentiment driver is the Stock Market.  If the stock market catches fever the car market goes to bed and gives it company (April stock market performance). All one needs to do is to co-relate the same over previous drops and one would see a strong co-relation.

4)       Expected increase in financial outlays:  Within the Indian Auto Industry, it’s a known fact, that, all you need to drive sales is to announce an expected imminent price hike in the media. Indian car manufacturer have mastered the art of using the same to their advantage over and over again. It happened in March 2012, when price hike due to excise changes drove the sales and check out December car ads and media news for last at least 4 years.

5)      Marriage Season: No one would admit it but this is one of the biggest sales driver in the Indian car market. Car manufacturer plot auspicious dates and plan schemes accordingly to woo such customers in droves.

6)       Festivals: Indian car buyers consciously or otherwise plan their new car purchase around festivals. Some obvious ones are; Pongal, Onam, Durga Pooja, Diwali, Navratra of any festival of decent importance. Car manufactures too offer their peak offers around these festivals.

7)       December Dhamal: Just about 5-6 years back, Indian car buyers would just not buy a car in December, thanks to year end change. But it’s no longer so. December car sales are now if not bigger are as big as any festival month sale. Big schemes and clever marketing have made Indian car buyers immune to year end change.

8)       Left Over Sales: Pardon my analogy, but that’s exactly what it should be called. Let me explain; some intelligent car buyers actually postpone their December purchase to the new year. Strategically they enter the market late Jan and seek ‘Last Year’s Cars’ (Left Over).  Not only do they enjoy December schemes but also additional discounts on year change models, thus stretching their rupee.

The Auto Industry is of the belief that April 2012 car sales cannot be taken as a true reflection of Indian car market. All thanks to the Indian car buyers preponing their car purchase to March to avail big schemes and pre-excise hike prices. May onwards things are expected to stabilise and one might see better numbers. Lets hope that April 2012 Sales was just and aberation, else it’s quite scary for the Indian Motown.

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