With festive season around the corner, the automobile industry is seeing a slight uptick in footfalls at showrooms, leading to hopes of an uplift from the deep decline in sales over the past few months.

“In the upcoming festive season, I am quite hopeful that there will be enough demand. I am basing it entirely on the fact that enquiry levels have gone up 5-7% for our petrol vehicles,” Shashank Srivastava, executive director (marketing and sales), Maruti Suzuki India told The Hindu.

The company is hopeful that they would be able to convert these footfalls to retail sales.

Asked if this festive season could kick-start the reversal of the slowdown for the industry, he said, “I do see light at the end of the tunnel but I am not able to gauge how far the light is. We will have a better outlook after a couple of months.”

Taking about recovery in the sector, he said, “Normally there is no sharp V-turn. It is usually a U-turn. You see negative become less negative and gradually going towards positive. It depends on how big the turning radius will be. That is what the debate is about. Frankly, given a lot of stimulus it can be V-turn, but as per current trend it will be a U-turn.”

An industry representative said while the industry was hopeful that the second half of the year would be better than the first, things were dicey as consumer sentiment remained low.

SIAM President Rajan Wadhera, who is also the president, Automotive Sector, Mahindra & Mahindra, echoed similar sentiments. “We always have light at the end of the tunnel, but everything depends on how long is the tunnel,” he said.

Asked about the upcoming festive season, he said these 2-2.5 months typically accounted for 20-25% of sales for all manufacturers. “There are higher sale scheme available... I think the same thing will happen this time.... may be a little bit more intense to generate demand... I think real situation will emerge post festive season.”

Deep discounts

In order to woo customers, carmakers are pushing deep discounts on vehicles, averaging around 5%.

In Maruti Suzuki, for example, the discounts range from ₹30,000 to ₹1 lakh.

“The discounts are almost at an all-time high for most models. It is the best time for a consumer to buy,” an industry representative added.

Likewise, asked about his forecast, Mahindra and Mahindra MD Pawan Goenka light-heartedly remarked, “Now in industry we have stopped forecasting anything beyond four hours from now.”

Mr Goenka, however, added that the industry will not make the same mistake of over estimating the demand as in last festive season, which led to a huge inventory pile up at the dealers. He added that Mahindra and Mahindra, which recently announced production cuts due to lack of demand, may go in for more cuts in October if the festive season sales do not pick up

Tata Motors Managing Director and CEO Guenter Butschek pitched for clarity from the government on scrappage policy as well as GST “here and now” so that consumers do not postpone sales in hopes of a further reduction in price, and the sector does not miss the festive season uptick.

On Wednesday, Honda Cars too had expressed hope for “some uptick” in sales in comparison to the steep declines seen in the last five months. Similarly, Toyota Kirloskar Motor has said it sees some pick up in sales but no “dramatic recovery”.