Dhanteras glitter goes missing for consumer appliances firms, automakers

Dhanteras glitter goes missing for consumer appliances firms, automakers

The last years’ glitter was missing for the majority of consumer appliance makers and automobile manufacturers this Dhanteras, as persistent inflation, the impact of the pandemic’s second wave coupled with the shortage of semiconductors, dampened the overall festive spirits of the shoppers. As per estimates, two-wheeler and car deliveries of are lower by 30 per cent compared to last year.

The are hoping to make up for the volume in the remaining days of the 45-day period that ends in Bhai Dooj on 5th November. They are also riding on the wedding season that kicks in soon after the festivals.

“We don’t see the euphoria we saw last year,” says Kamal Nandi, business head and executive vice president at Godrej Consumer Appliances.

Eric Braganza, president, Consumer Electronics and Appliances Manufacturers Association (CEAMA) 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 which Indian auto retail has seen in the last decade,” said Vinkesh Gulati, president of the Federation of Automobile Dealers Association.

While chip shortage is impacting supplies in PV creating a huge shortage of vehicles in SUV, compact – SUV and luxury segment. Entry-level PV is still seeing less demand due to customers conserving money for healthcare needs, he said.

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

Consumer appliance makers echoed the sentiments. According to Godrej Appliance’s Nandi, 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. “They are unwilling to spend and continue to save for health emergencies,” said Nandi, adding that demand for the low-frill variants of consumer appliances has 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. He blamed it on a persistent inflationary trend and a subsequent 15-16 per cent price hike taken by the consumer appliance firms.

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

Others are hoping to make up for the loss in the coming days. “Surprisingly, the sales have been low compared to last year. We had a brilliant Sunday. I would like to believe this is an aberration and people didn’t venture out on account of it being 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 that have been facing supply issues due to chip shortage, 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 the deliveries to be almost on par with last year but the stocks will be depleted big time,” he said. Maruti delivered 15000 cars last year.

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