Auto Industry Accelerates as Festive Season Boosts Sales Amid Surge

The 2023 festive season has been a boon for the automobile sector, marking a remarkable surge in sales. Passenger vehicle (PV) sales witnessed an outstanding 41% increase year-on-year during the festive period between Onam and Bhai Dooj. This prosperous season, coinciding with the World Cup, has been an added advantage for the industry.

Industry estimates indicate an impressive sale of approximately 1.138 million passenger vehicles, encompassing cars, sedans, and utility vehicles, within the domestic market from August 17 to November 14. Notably, the sales of utility vehicles, particularly SUVs, experienced a substantial uptick, contributing significantly to the overall spike in auto brands' sales.

Shashank Srivastava, Senior Executive Director at Maruti Suzuki, revealed a staggering 44% surge in sales for the brand during the festive season, amounting to 4,90,000 units, compared to the previous year. However, considering the increase in festive days from 71 to 90 this year, the growth is approximately 15% on a like-to-like basis.

Regarding advertising spends, Srivastava emphasized strategic allocation across brand positioning, sustainability, tactical spends for final conversions, and investments in corporate image and technology. Festive spends usually follow a 40:60 ratio, with 40% in the first half and 60% in the latter. This season's estimated festive spends are anticipated to be around Rs 70-75 crore.

Hyundai Motor India reported a notable 15% year-on-year growth in domestic wholesales during October, amounting to 55,128 units compared to 48,001 units last year. Tarun Garg, Chief Operating Officer at Hyundai Motor India, highlighted the retail of 1,65,000 vehicles between Onam and Bhai Dooj, marking a 9% growth from the previous year, with SUVs constituting 65% of the total sales.

Luxury car segments also enjoyed a prosperous festive season, signaling an upward trajectory in demand for high-end cars, likely to persist. Mercedes-Benz India's Lance Bennett expressed a positive outlook owing to robust customer sentiments, new product launches, and an extended festive season. Supply chain disruptions, especially affecting SUV availability, remain a challenge.

Mercedes-Benz prioritized digital platforms, alongside print and OOH, for advertising during the festive period. While the exact figures weren't disclosed, Bennett highlighted the high engagement witnessed on their digital platforms.

The selection of media and genres poses challenges, particularly in tactical spends. Maruti Suzuki's Srivastava cited investments in the World Cup, allocating Rs 50 crore for television, Rs 15 crore for OTT, and Rs 35 crore for television advertising. Anticipating reduced ad spends in Q4, Srivastava emphasized that tactical spends might adjust based on market conditions, primarily focusing on print and limited television ads.