Car makers pull all stops to beat the pandemic blues ahead of festivals

The benefits range from cash discounts, attractive EMIs to Covid-19 cover

From cash discounts to insurance cover for Covid-19, automakers are launching various schemes to beat the pandemic blues and attract buyers ahead of the festive season.

While festivals have always been crucial for auto companies, this year the period will be of greater relevance as firms try to make up for the volume loss it suffered in the June quarter due to the pandemic-induced lockdown. Constrained with smaller marketing and sales promotion budgets, companies are leaving nothing to chance to ride on the so-called ‘pent-up’ demand. They are also hoping to cash in on the trend for personal mobility as commuters shun public transportation.

Take Honda Cars India, for instance. As part of its annual ‘Great Honda Fest’ it has launched offers on most its models till October 31. It includes benefits of up to Rs 250,000 on the Civic, Rs 47,000 on the Amaze, Rs 30,000 on the 5th generation Honda City, and Rs 40,000 each on the Jazz and WR-V.

Similarly, Mahindra & Mahindra launched a free coronavirus insurance plan for its Bolero pick-up range, offering a floater cover of up to Rs 1 lakh to the vehicle owner and his family members (up to two children) as part of its mega festive offer. The insurance plan can be availed between October 1 and November 30 on the Bolero pick-up range which includes the Maxi Truck, City pickup and Camper, the company said.

Tata Motors also launched its festive offer on Friday. It includes an of offer of Rs 65,000 on the Harrier, Rs 30,000 on the Tigor, Rs 15,000 on the Nexon diesel, and Rs 2,500 on the Tiago. The offers are applicable till October 31.

Luxury car firms that have been hit harder are also riding on the festive bandwagon. Audi India recently launched an introductory ‘Peace of Mind’ benefit that comes bundled with a 5-year service package with 2+3 years of extended warranty, and 2+3 years of road side assistance for the new Q2 it is launching next week. On Friday, it launched the Q8 celebration model at Rs 98.98 lakh for the festive season.

“Customer sentiment was low during the lockdown, the silver lining is the pent up demand that could materialise into sales over a period,” said Balbir Singh Dhillon, head Audi India. The VW group firm is seeing positive customer sentiment in the luxury car market and anticipates it to become even stronger with the upcoming festive season.

Auto sales in India touched a decadal low in FY20 as a slowing economy, higher acquisition cost, and economic uncertainty weighed on sentiments. The outbreak of the pandemic in March and a subsequent lockdown in April added to the woes. With companies ramping up production after a zero sales and production month in April and re-opening of cities, sales have been picking up since the last four months. In anticipation of a strong pent up demand, companies are stocking up the channels.

Analysts are positive of the volumes ahead. Volume momentum should remain strong in October, supported by a festive season and further ramp-up in production. We expect H2FY21 volume performance to be positive across passenger vehicle and two-wheelers, Emkay India said in a recent research report. However, auto firms remain cautiously optimistic and aren’t sure if the demand will sustain after the festive season.