Discounts fire up demand as festive season kicks off

New Delhi | Kolkata: Hefty discounts and promotional offers have helped trigger some uptick in car and consumer electronic sales during the ongoing Ganesh Chaturthi and Onam festivals - which herald the festive season - after sluggish demand so far this year.

Maruti Suzuki reported a 10% increase in bookings in Kerala ahead of Onam, while on the first day of Ganesh Chaturthi, the country's largest car manufacturer's deliveries in Maharashtra and Karnataka went up at the same pace, its senior executive officer (marketing and sales) Partho Banerjee said.

Two-wheeler sales continued to grow at over 15-16% pace during Onam while consumer electronics sales in Kerala went up by 7-8% over last year when overall sales had declined, industry executives said.


However, the trend of the premium end of the market driving most of the demand continues across most consumer goods including cars, they said.

Kamal Nandi, business head at refrigerator and washing machine manufacturer Godrej Appliances, said there is not much traction in the mass segment with premium products mostly driving sales during Onam. "Mass segment sales remain need-based, like we saw good demand during summer due to heatwave," he said.

Nandi said Onam has been better than last year, but the growth rate is not up to expectations.

Industry executives said there was a 15% growth in sales of frost-free refrigerators during Onam while entry level single-door refrigerators sales declined by 6-7%. In washing machines, pricier fully automatic model sales went up by 12-13% while semi-automatic machines sales reported a marginal growth of 4-5%.

Apple started pre-bookings for its latest iPhone 16 series from Friday evening, and customer response in the first 24 hours reflects better demand than last year, industry executives said.

Sales during Onam give an early demand trend of the festive season that peaks during Diwali.

To be sure, volume sales or the number of units sold during the festive season tends to grow at 12-15% in a good year, while for cars the growth is usually up to 20%.

The auto industry had a high base last year during the festive season. So, the growth rate may remain low but absolute volumes are expected to expand, helping the industry bring down unsold stocks, industry executives said.

"While these are positive indications helping the industry to get over the demand lull in the last few months, festive season growth may seem muted because of the high base of last year," Banerjee of Maruti said.

Yogesh Mathur, director (sales and marketing) at Honda Motorcycle & Scooter India, expects this festive season to be one of the best for both scooters and motorcycles as the demand that was expected in the rural areas has yet to take off. "Indications so far are positive," he said.

There is a certain amount of pent-up demand in the market due to weak sales in the first five months of the fiscal because of elections and weather-related disruptions, Federation of Automobile Dealers Associations president C S Vigneshwar said. Aided with discounts, this has started spurring car sales during Onam.

Automobile industry volumes this festive period are expected to increase by about 15% over average monthly sales of 330,000 units seen in the first five months of the fiscal year.