For carmakers, this Navratri and Dussehra may have been the dullest in six years, with surging fuel and upfront insurance costs causing sales to skid. Against expectations of double-digit growth, Ganesh Chaturthi and Onam had already failed to accelerate sales and the industry might well consider it an achievement if 2018 festival season volumes even match those of last year.
Ashish Kale, the newly elected president of the Federation of Automotive Dealers Association, said retail sales fell 5-20% for cars and 15-20% for two-wheelers. However, commercial vehicle sales remained strong during Navratri and Dussehra, providing some reason for optimism. “Dealer inventory is high due to low sales. One is hoping that the enquiries that have remained robust get converted into sales during Diwali (in November),” said Kale.
The reasons holding back buyers include at least a 15% increase in fuel prices over the past few months, a more than 100% rise in upfront insurance expenses, and the 50-basis point inflation in financing costs. Festival-season sales growth could be the lowest since FY13, according to analysts tracking aggregate performance.