7th Pay Commission: Auto makers expect spurt in sales

Carmakers are eyeing an over 25% growth in sales to government employees and pensioners as their salaries increase

Top carmakers, including Maruti Suzuki India, Hyundai and Honda, are expecting a spike in their sales following the implementation of 7th Pay Commission recommendations.

Car market leader Maruti Suzuki India (MSI) is eyeing an over 25% growth in sales to government employees and pensioners at 2.5 lakh units this year, riding on the hike in their salaries.

"Central and state government are a high potential segment for us, contributing about 17% to the total volume. With increase in disposable income in the hands of 50 lakh central government employees and 58 lakh pensioners, we expect an impetus to car sales in this segment," an MSI spokesperson said.

Last year, MSI sold over 2 lakh vehicles to the central and state government employees.

"This year with the implementation of 7th Pay Commission, we are expecting to sell over 2.5 lakh plus units in this segment this year," the spokesperson added.

With sales network of over 1,900 touch points and a slew of new models like Ciaz, Ertiga SHVS, Baleno and Vitara Brezza, the company is set to leverage this opportunity, the MSI spokesperson said.

The company said it has sold a total of 15 lakh vehicles under 'Wheels of India', a special programme for government employees since 2006.

Expressing similar sentiment, Honda Cars India Senior vice-president (Marketing and Sales) Jnaneswar Sen told PTI: "It is positive for the auto industry. Arrears and increments will lead to more cash in hand for consumers which will lead to more discretionary spending. At least in the short-term we are looking to increase in sales of automobiles."

Hyundai Motor India, General Manager, Marketing, Puneet Anand said the decision will go a long way in fulfilling the aspiration of the one crore central government employees and pensioners.

"Hyundai Motor India will further enhance the delight of these discerning customers through over Pride of India offer under which customers will get additional benefit up to Rs 7,000 over and above the prevailing offers," he added.

In a bonanza for over 1 crore government employees and pensioners, the Cabinet on Wednesday approved implementation of the 7th Pay Commission, which had recommended an overall hike of 23.5%.