The festival of lights has brightened up the automobile and durables market. Business has been brisk for manufacturers of these products as stay-at-home consumers demand items of convenience and the need for personal mobility drives up sales of cars.
Conversations with retailers and manufacturers reveal that sales growth has been in double-digits for home and kitchen appliances during the Diwali period this year versus last year. Car dealers say that some models have stocked out.
Car market leader, Maruti Suzuki India, for instance, delivered 37,000 cars between 12 and 14 November. This was not only marginally higher than last year, but also more than the average three days of sales since the last three years, said Shashank Srivastava, executive director, sales and marketing, Maruti Suzuki.
“This can be attributed to pent-up demand and a preference for personal mobility,” Srivastava said. While demand after the Diwali season is uncertain, car makers are enjoying their moment in the sun for now.
A spokesperson at Tata Motors said that the company had witnessed a strong growth during the festive period. “Our bookings have increased by 95 per cent and retail sales have gone up by 90 per cent compared to the FY20 festive season,” a Tata Motors spokesperson said, adding that traction was equally good for both cars and SUVs. The Harrier has seen a growth of 114 per cent year-on-year.
“Overall, it was a mixed bag,” said a dealer principal for some two-wheeler and four-wheeler brands. Some of the high-selling models of Mahindra and Hyundai have stocked out, he said.
Kamal Nandi, business head and executive vice-president, Godrej Appliances, said that demand had been good during the Diwali season. "There has been a like-to-like growth of about 10-12 per cent during the 13 days going into Diwali as well as the Diwali weekend," Nandi says. He is also the president of the Consumer Electronics and Appliances Manufacturers Association, an apex body of durable makers.
Nandi attributes a combination of factors for the uptick seen during Diwali, including a postponement of purchase to the festive period, appliances being a substitute for domestic help in urban areas and momentum in rural areas.
Nandi also says that most manufacturers have withheld price hikes for now, pushing consumers to make their purchases during the Diwali season. "There could be price hikes from December as commodity prices are hardening. Plus, there are challenges on the import front leading to a shortage in supplies, which will affect the price of products," he said.
Banks and finance companies continue to be aggressive with their cashback and consumer finance schemes, say analysts, giving people a reason to make their purchases now. While the online medium remains a key go-to-channel for most consumers this year due to the pandemic, offline retailers such as Croma say that business has been good.
"We have held on to momentum that we saw since August. Diwali (as of Friday, which was Dhanteras) saw an 18 per cent sales growth over last year and we anticipate that the weekend will be good from a business perspective," Ritesh Ghosal, chief marketing officer, Croma, said.
A study last week by the Retailers Association of India (RAI) said that consumer durables as a category had recovered sharply versus other segments, showing a sales growth of 8 per cent in October. RAI had said that the positive trend for consumer durables would continue into November, led by the Diwali season.
Shekhar Bajaj, chairman, Bajaj Electricals said, "We've virtually stocked out. The last two months, in particular, has seen demand peak. The Diwali season too continues to show this trend. Items such as ovens, toasters, grillers, induction cookers, mixer-grinders are in high demand because people are cooking at home."
Bajaj says that the post-Diwali period will continue to see high demand for kitchen appliances, since the wedding season will kick off. Small appliances are typically brought in large numbers during the wedding season as gifting items, experts said.
Avneet Singh Marwah, chief executive officer, Superplastronics, brand licencee for Thomson and Kodak TVs, said,"This Diwali, we have seen a 75 per cent growth over last year. We are now selling the top three online smart TV brands. We have seen a huge spike in 43-inch and 55-inch 4K TVs. The market is shifting towards bigger screen sizes."
Vijay Babu, vice-president, LG Electronics India, said, "Since the markets have reopened, the sale of premium refrigerators, washing machines and all other consumer durable categories have gone up sharply. So far, this festive season, we have grown by 28 per cent, while our premium segment has grown by over 60 per cent."