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Diwali car sales drop 50% despite huge footfalls

A month ago, dealers faced a similar situation during Navratri when the actual sales were not so exciting though the wholesale figures of most vehicle manufacturers told a different story

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Automobile dealers had expected a cracker of sales in Diwali given the huge footfalls, but were disappointed as sales have been less than 50% of the previous years.

A month ago, dealers faced a similar situation during Navratri when the actual sales were not so exciting though the wholesale figures of most vehicle manufacturers told a different story.

A sales executive at a Maruti Suzuki dealership in a western suburb of Mumbai said on the day of Dhanteras there were just six walk-ins in the showroom while the total sales were about half of what it was during the Diwali last year. The dealership normally sells around 300-325 units per month.

Parind Nachinolcai of Priority Automobile in Goa said there was no enthusiasm among the customers despite Diwali as many of them had postponed their decisions or not made up their mind for the purchase. The company sold just 10 units more as compared to their monthly average sale of about 130 cars.

"We had anticipated sales of around 200 units during this Diwali. But the lack of certainty in the market on account of economic factors like GST and other issues was a dampener," said Nachinolcai.

During their interaction with the customers, the showroom owner found that many of the businessmen who form a major chunk of their customers have still not filed their GST returns and were, therefore, unsure about their tax implications, as a result of which they pushed their decision for future.

"Also, just before the festival season there was an increase in cess on cars, thereby reverting the benefits on cars on account of GST implementation earlier," Nachinolcai said.

The automobile industry like most other consumer products sees a huge jump during the festival season around Diwali as many consider it auspicious to make purchases during this period. Also, a few others postpone their purchases until the festive season, with the expectations of getting better deals and discounts from car manufacturers. For example, Maruti Suzuki, the country's largest carmaker by market share has been offering discount and benefits ranging from Rs 20,000 to Rs 75,000. Mahindra & Mahindra (M&M) has a similar offer. Few other companies offered gold coins along with the purchase of the vehicle. Maruti Suzuki spokesperson said sales this Diwali were similar to the previous years.

However, there are others who see the change in trend as now increasingly people tend to buy as and when they want and would not like to wait for Diwali. A senior sales executive from a Mumbai-based M&M said the trend of people purchasing during Diwali has been on a decline since past 2-3 years. " I have been in this industry for over 15 years but the trend as such seems to be changing now."

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