Avik talks about the importance of the festive season to carmakers and ways in which they can boost sales.
The three months of September to November are crucial for all automakers in India. This is the festive period all over the country, accounting for close to 35 percent of total annual sales. Each brand plans an onslaught through promotions, building network stock, advertising, product launches and sponsorships. My friends in media agencies tell me that around 30 percent of the cumulative annual communication budgets are kept aside for this period.
As you are reading this, the automobile industry will be in the midst of investing close to Rs 1,500 crore this year, as per some newspaper reports. It has been particularly tough this year, for obvious reasons. Therefore, the onslaught needs to be more intense as, come December, it will be a long hard winter right till March. The network pipeline has filled to the brim in July and August. Production has been ramped up and September has seen factory stockyards full up. Reaching 2019 numbers in the same period (which were tepid anyway) will take quite some doing. This is do or die, or at least dwindle.
The early moves have been made. Kia launched the Sonet, creating quite a flutter with its design-value equation. The IPL, coinciding with this period due to its postponement, has seen Tata, Maruti Suzuki and even Mercedes-Benz joining the cricket party, either through a physical presence at the venue or digitally. A few more product upgrades and launches would have happened too.
The passenger car market rests very much in urban India and if the consumer sentiment there is still negative and unsure, I believe tactics that were used yesterday will not work today. New consumer insights will have to be used to craft new methods of engagement. This is not about building awareness or affinity, as there is an information and content overload anyway. This is not about generating interest. Much research has shown consumers interested in buying cars without really committing on when and how.
This is about making the interested consumer an offer they cannot refuse. This is going to be all about conversions. And with a pie smaller than usual, it is going to be one’s gain at another’s expense. Thus, true innovations and a certain amount of risk taking will find success.
There are a few that come to my mind. Offer interest-free loans. Offer longer loan tenures. Offer EMI holidays on credit scores. Offer six-month and one-year ownership plans. Offer a lower price on select entry-level variants, booked online. Offer guaranteed buy-back rates. Offer ‘use and return’ on specific products or variants to encourage trial. The gold coins, extra accessories and maintenance packages will not work. Nothing risked, nothing gained.
For the big fish in the pond, they do have deep pockets to take a few calculated risks. For the small fish, their survival is at risk if they do not. Happy selling!
Attractive new car, SUV discounts this Diwali
Maruti Suzuki Swift Limited Edition launched at Rs 5.44 lakh
Volkswagen Polo, Vento Special Edition variants launched
Honda Amaze Special Edition launched at Rs 7.00 lakh