These include the growth in GDP, the slight softening in fuel prices and the crop support prices announced for the farmers. However, he pointed out that there were certain positives that were also building up in the market. “When the sentiments are down, every category witnesses pressure.” Kalsi said it is “difficult to provide a forecast” on how the market would behave in the new fiscal, considering the variety of factors that have been pulling down the numbers currently. Pressure due to low demand has been felt across vehicles categories, but has been particularly strong for first-time buyers. “The average discount was around Rs 15,500 in the second quarter of last fiscal, and the same was around Rs 18,500 in the same period of 2018-19,” Kalsi said. Maruti has already said that discounts were higher by nearly 20% in the second quarter of this fiscal against the same in the previous year. We were expecting to move up by doubt-digits, and could only grow by around half.” Discounts have been high in the industry as companies try and lure buyers to showrooms. “The sales were not on expected lines, and the growth was on expected projections. Speaking about the sales pressure on the retail front, Kalsi said the festive season has “not been on expected lines” this year on account of the slowdown pangs. Delhi and Pune, also heavy-volume markets, could manage only a 2% growth. In 2017-18, sales had fallen by 20% in Mumbai, 11% in Bengaluru, and 4.5% in Chennai. The urban growth is estimated at 2-3%.” This will be second year when the urban markets - which provide the bulk of sales in India - are proving to be laggards. “The rural markets have grown by 12-14%, while the urban markets are moving slower. They lag the rural markets which are growing at a faster pace. Kalsi said that urban markets, which provide a larger share to the sales of carmakers, are feeling the pinch. The weak numbers have been particularly alarming as they have come during the festive period which normally is a bumper period for carmakers. New vehicle sales have been under pressure and Maruti has witnessed flat growth over the past two months (year-on-year).
Urban markets lag rural in car sales for 2nd year "If a customer decides not to buy, we can’t do anything in that situation," Kalsi said.
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