Dhanteras glitter dims for consumer appliances firms, automakers

Inflation, second Covid-19 wave, semiconductor shortage major reasons behind tepid sales

It was Dhanteras alright but the usual sheen was missing, especially for the majority of consumer appliance makers and automobile manufacturers.

Companies blamed persistent inflation, second wave of Covid-19, coupled with shortage of semiconductors, for the dam­p­ened overall festive spirits of shop­pers. According to estimates, two-whe­eler and car deliveries on Dhanteras were lower by 30 per cent as compared to last year.

The companies are now pinning their hopes on the last few days of the 45-day festive season, which ends with Bhai Dooj on November 5, to salvage the numbers. They are also riding their hopes on the wedding season that kicks in soon after the festivals. “We don’t see the euphoria of last year,” says Kamal Nandi, business head and executive vice president, Godrej Consumer Appliances.

Eric Braganza, President, Consumer Electronics and Appliances Manufacturers Association (CEAMA), however, said the “sales have been good so far”, and he is hopeful of a further improvement in the days ahead. The mood of those in the automobile business is worse. “This is the worst festive season for Indian auto retail in the last decade,” said Vinkesh Gulati, President, Federation of Automobile Dealers Association.

Chip shortage is impacting supplies in personal vehicles (PVs), creating a huge shortage of vehicles in SUV, compact SUV and luxury segment. Entry-level PVs are still seeing less demand due to customers conserving money for healthcare needs, he said.

“Sale of entry-level two-wheelers are not picking up due to rural distress, fuel prices and people are still trying to save for healthcare emergencies rather than making a high value purchase,” he said.

Consumer appliance makers echoed the sentiments. Godrej Appliance’s Nandi said even as the urban demand has seen an uptick since the last weekend—20-25 per cent day-on-day since the last four days — rural sales remain tepid.

Clearly, the rural buyers are still recovering from the impact of the second wave. Nandi said the demand for low-frill variants of consumer applian­ces have taken a bigger hit, while premium segment products are seeing a 20 per cent growth year on year. “Last year, there was a pent-up demand from the first quarter. We don’t see any such trend this year and expect the overall festive season to be flat year-on-year,” said Nandi, blaming a persistent inflationary trend and a subsequent 15-16 per cent price hike taken by consumer appliance firms for the situation.

Braganza, however, said he wasn’t worried about the weak demand in the mass segment, pointing out that it was in line with past year’s trend. “Typically, mass market segments show a jump once the marriage season kicks in,” he said.  

Others are hoping to make up for the loss in the coming days. “Surprisingly, the sales have been low as compared to last year. We had a brilliant Sunday. I would like to believe this is an aberration and people didn’t venture as it was a working day. We are hoping to make up for it in the remaining days of the festival,” said Nilesh Gupta, managing director at Vijay Sales. For carmakers, though, the pain is expected to linger on. Shashank Srivastava, executive director, sales and marketing at car market leader, Maruti Suzuki India, said, the overall deliveries have been severely impacted due to the chip shortage. “We expect Dhanteras deliveries to be almost on a par with last year, but the stocks will be depleted big time,” he said. Maruti delivered 15,000 cars on Dhanteras last year.