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Festive season sales: Automakers and realtors had reasons to cheer, but some concerns still exist

Festive season sales: Automakers and realtors had reasons to cheer, but some concerns still exist

The festive season was bright for automakers and realtors, but sales in certain consumer goods segments remained flat

The festive season was bright for automakers and realtors, but sales in certain consumer goods segments remained flat The festive season was bright for automakers and realtors, but sales in certain consumer goods segments remained flat

It’s that heady time of the year when manufacturers line up offers to lure customers who are generally easier with their wallets, thanks to a string of festivals, in anticipation of bumper sales in the run-up to the end of the calendar year. While a majority of them—from makers of washing machines and television sets to two-wheelers and passenger cars—have reported a festive boost, this season has left some high and dry.

During the 40-odd-day festive period—between early October and mid-November—while sales of automobiles and television sets surged significantly, categories like home appliances remained flat.

Take the country’s vast automotive sector, for instance. After touching a new high in 2022, sales surged to a new record of about 3.8 million units in the festive season, up from some 3.2 million in the corresponding period last year. While the two-wheeler segment—the largest in terms of number of units sold—has been a major cause of concern for most manufacturers, with rural consumers shying away from purchases, this time it was this segment that drove the growth of the sector, says Manish Raj Singhania, President of the Federation of Automobile Dealers Associations (FADA).

“These are record numbers. Consumers from the rural market, which accounts for 70 per cent of the two-wheeler sales in India, flocked to dealerships during the festive period. Passenger vehicle sales also scaled a new high, crossing 500,000 units for the first time in history,” Singhania tells BT. Buoyancy in the auto sector was also reflected in sales of three-wheelers, used mostly for commercial purposes, which rose to 142,875 units in the season, up 41 per cent from last year.

Last year, the availability of vehicles at the dealers’ end was an issue that resulted in prolonged waiting times and, eventually, impacted sales. This time, however, such bottlenecks were managed. “Moreover, while we were concerned about the demand from the rural market for the first six months of the year, during this festive season even the rural consumers came out in large numbers to make purchases,” he adds. Moreover, the recent Assembly elections in five states also played a positive role in boosting demand as sales picked up in areas where elections took place, he says.

In the consumer durables sector, however, there were mixed signals. While makers of smart televisions and washing machines witnessed a jump in sales of premium products, sales of mass-market products remained subdued. According to Kamal Nandi, Business Head and Executive Vice President of Godrej Appliances, categories like washing machines and refrigerators that traditionally sell well during the festive season recorded high demand, albeit in the premium segment. “Even, surprisingly, the air conditioner category performed well during the festive period. But the mass market segments did not register volume growth. Overall, the business has grown by double digits due to higher offtake of pricier items and price appreciation,” he says.

In the smart TV space, manufacturers struck gold thanks to the ICC Men’s World Cup that was held in India during the period. Per industry estimates, the category recorded a massive 20 per cent growth in

sales of TV sets. However, like in the other large white goods items, the sales were more confined to the premium and large-screen smart TV segment. “This season, we witnessed consumers from even smaller towns moving towards 55- to 65-inch TVs. The 32-inch segment that used to form a large chunk of the overall market a few years ago is now contracting,” says Avneet Singh Marwah, CEO of Super Plastronics, which manufactures smart TVs under the Kodak, Thomson, and Blaupunkt brands.

Meanwhile, in the real estate market, too, sales of residential homes are estimated to have surged by double digits, which will boost the overall sales numbers for the October-December quarter by 10-15 per cent over last year, says Anuj Puri, Chairman of real estate consultancy Anarock Group. “We have definitely seen a major surge in both new launches and housing sales this festive season. Several leading developers have a healthy pipeline of new project launches in the festive quarter across the Top 7 cities.”

Not just large-ticket items, in categories like cookies and savoury snacks that Indians widely purchase as gifts during the festive period, sales rose even in the rural market. Parle Products witnessed sales picking up as early as August, and it gained momentum closer to Diwali, says Mayank Shah, Senior Category Head at the Mumbai-based packaged foods major. “The rural market responded well after the monsoon and lifted the business in the mass market price segments that were suffering earlier. We have recorded close to 10 per cent growth this Diwali over last year,” he tells BT.

The festive season may be throwing up some encouraging growth numbers, even from the rural market, but industry veterans like Singhania remain cautious, or rather cautiously optimistic. “We need to observe this trend for at least four to five months,” says Singhania. For now, clearly, the numbers are encouraging overall, albeit with some pockets of concern.


Published on: Dec 07, 2023, 7:29 PM IST
Posted by: Priya Raghuvanshi, Dec 07, 2023, 12:19 PM IST