Companies & Sectors
Car sales in May hampered due to rising cost of ownership

Recent increase in petrol prices, coupled with a hike in excise duty and vehicle prices as well as stiff interest rates have increased the cost of ownership, especially for petrol-run vehicles

 

Car sales during May grew at the slowest pace in seven months reporting 2.8% growth as high interest rates and petrol prices continue to hit the market, reports PTI.

According to figures released by industry body Society of Indian Automobile Manufacturers (SIAM), domestic car sales in May stood at 1.63 lakh units as against 1.58 lakh units in the same month last year. “This is the slowest growth since October last year when car sales witnessed a decline of 23.8%,” SIAM director general Vishnu Mathur told reporters in the capital.

“The softening of interest rates, which was expected to happen has not materialised and continues to be high. Moreover, high petrol prices have also affected sales and the overall sentiment in the market is very negative,” he added.

Increase in prices of vehicles following the excise duty hike in the Budget has also had a major impact, Mr Mathur said, adding that even diesel vehicles which used to have a lot of demand had tapered off. The recent increase in petrol prices, coupled with hike in vehicle prices and stiff interest rates have increased the cost of ownership, especially for petrol-run vehicles.

“In the premium and executive segment, which are generally considered to be price insensitive, the demand for diesel vehicles has slowed down,” Mr Mathur said.

At such a time, he added, “If the government goes ahead and decides to tax diesel vehicles more, the overall demand will suffer all the more”.

Motilal Oswal Securities, in a research note said, “Slowdown earlier visible in passenger cars (2.2% FY12 growth in domestic cars) is now clearly evident in two-wheeler volumes as well, with growth rate moderating to about 10% over the last four months (Vs 17% in eight months of FY12). However, utility vehicles (UVs) and light commercial vehicles (LCVs) continue to record strong volume growth. Although volume outlook in the short-term is impacted by macro headwinds, we believe long-term volume outlook remains positive driven by strong economic growth, softening in interest rates, new product launches and exports potential.”

During May, in the passenger car segment, market leader Maruti Suzuki’s sales dipped by 5.9% to 72,309 units. However, rival Hyundai Motor India's sales increased by 3% to 31,939 units. Tata Motors, India’s largest vehicle maker witnessed 6.7% increase in car sales at 17,371 units.

In May, total sales of vehicles across categories registered an increase of 10.5% to 15.13 lakh units as against 13.7 lakh units in the same month last year. Total two-wheeler sales last month increased by 11.4% to 11.92 lakh units from 10.7 lakh units in May 2011.

According to the SIAM data, motorcycle sales in the country grew 7.2% during May to 8.9 lakh units from 8.3 lakh units in the same month last year. In this segment, market leader Hero MotoCorp posted 10.7% jump in sales to 5.0 lakh units in May. However, rival Bajaj Auto's sales went down by 5.3% to 2.1 lakh units during the month.

Honda Motorcycle & Scooter India (HMSI) posted a 45.5% increase in sales to 88,334 units, while TVS Motor moved 47,175 units, 14.5% less than the corresponding month of the previous year.

The scooter segment’s overall sales grew 34.4% to 2.4 lakh units from 1.7 lakh units.

HMSI’s scooter sales grew by 65.5% to 1.24 lakh units in May, while Hero MotoCorp sold 36,312 units, up 24%. TVS Motor's sales saw decline of 2.4% during the month to 34,936 units.

Commercial vehicles sales grew by 9.1% to 62,025 units during the month, from 56,841 units in the year-ago period, SIAM said.

Medium and heavy commercial vehicle sales declined 10.6% to 22,227 units during the month compared to 24,858 units in May last year.

According to SIAM, light commercial vehicle sales grew 24.4% to 39,798 units in May 2012 from 31,983 units in same month a year ago.

In the three-wheeler category, sales fell by 3.3% to 37,184 units from 35,988 units in the same month last year.

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Ads: Colgate, Nerolac and Parachute

Advertisements come and go, but some leave a lasting impression, while others are forgotten as soon as we have seen them. The writer gives examples of some recent ads that could have been portrayed better

 

According to the Oxford dictionary, to advertise is:  “To tell the public about a product or a service in order to encourage people to buy or use it”.
 
Advertisements come and go, but some jingles stay on forever! Some leave a lasting impression, while others are forgotten as soon as we have seen them. Apart from product or service selling, the motive of an advertisement is also to ‘educate’ the viewer. This is the basics!
 
In the recent weeks we have had a few advertisements that are covered in this brief. Take the Colgate campaign, for instance. In one campaign, the bridegroom takes a bite (in the middle of the ceremony!) and has ‘pain’ or “tingling feeling” from his teeth. What happens? The pandit pulls out the Colgate toothpaste and hands over! In a moment, the groom is feeling fine!
 
In another, while watching a movie, in a theatre, the viewer eats something and has similar pains as the groom. What happens next?  On the screen, we have a damsel in distress, pulled apart and manhandled by thugs, but she miraculously sets herself free, virtually walks out the screen, and hands over the Colgate tube to the viewer who is suffering with pain. She didn't have the “pepper spray” to distract the attackers, but had the Colgate in her... don’t know where! She does not run away, but returns to meekly ‘surrender’ to the thugs!! What a shame.
 
The third one, probably, the only the sensible promotion, a dentist is shown explaining to the kids how Colgate helps to improve their gums and make their teeth strong.
 
In the next campaign, we have a careless and irresponsible man spitting out his paan on the wall, staining it.  What happens next? Shah Rukh Khan has a pail of Nerolac paint, and whole bunch of school kids jumping all over the place and painting the stain with the fantastic Nerolac. And, of course, they paint the place all over!  

Actually, this campaign could have been most sensibly portrayed. Shah Rukh Khan, instead of showing his ‘dadagiri’ could have confronted the man, explained to him the public nuisance he committed, and, perhaps, made him wash the place first, before joining King Khan in painting the wall with Nerolac!  He could have even gone further and said a word or two, to dissuade the pan eater to avoid ‘tobacco’ as it will cause cancer!
 
Wonder why Nerolac didn’t think of this?
 
Taking the flight to go down south, we have Dhanush (Why this Kolaveri di? fame) sitting as auto driver, waiting for a customer. Looks like a policeman, on duty, demanding a Rs50 ‘mamool’ or ‘bakhshis’.  For what we do not know, but, the auto driver acts as though he is deaf, and, after a couple of exchange of words, the policeman walks away in disgust! Moments later, auto driver gets a passenger and on his way.
 
All because, Dhanush uses “Parachute Advanced Cooling Oil”; so, he remains ‘cool” in spite of the police provocation and demand.
 
Dhanush, who also has a great following like Shah Rukh Khan, instead of accepting such campaigns, missed the opportunity of protesting against the act of ‘bribery’.  He may have remained and acted ‘cool’ because he uses “Parachute Advanced Cooling Oil” but he could have put his foot down to say that ‘paying’ or ‘taking’ a bribe is wrong.
 
So, to Dhanush, we may just ask: “Why this mishtake dey?”

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COMMENTS

ramchandran

4 years ago

Responsible advertisements are a passe , our stars only work for the moolah. Can one explain the likes of Sachin, Hrithik working for the Hometrade finance advertise where thousands of investors lost out!!!

Raymond Torres

4 years ago

that was a very interesting article

Helping guests in times of crisis has its rewards

While smokers caused immense trouble to the hotel staff, helping guests in times of crisis gets the writer “the employee of the month” award. The 45th part of a series describing the unknown triumphs and travails of doing international business

Our motto was to keep the customer happy in every manner possible, as long as their actions did not violate any law. Very often, however, we had our guests stretching our patience in generally violating the rule of smoking in non-smoking rooms. This act, as one can realize, leaves a bad odour all over the suite, and it takes a great amount of time, energy and expense to clean other items in the suite, down to curtains and special cleaning of carpets. Bed linen was cleaned every day, and some ‘considerate’ smokers used to enjoy their smoke in the balcony (which were in some suites), and yet, the smell would travel to the main suite and smell bad.
 
At the first sign of trouble like this, we would endeavour to get them shifted to smoking area, if suites are readily available; if not, request them to refrain from smoking and warning them that they would be subject to a special cleaning charge of $100; and also, they would have to move to suites in the designed floor at the first opportunity.
 
Overbooking the capacity was a regular feature in those days, but there were occasions when due to series of unfortunate and unexpected events created huge problems not only for us but to most other establishments. This covered the first problem arising out of bad weather locally that results in cancellation of all flights. This would also mean that flights cannot land as well and trouble starts when there is a mis-match of these figures. Also, many guests who had checked out early in the day, found themselves in difficulty, because the weather turned bad in the afternoon!  On the top of these, we had the situation where our airports were functioning normally but weather conditions at the arrival points (ports) were bad and so flights could not take off from our city!  Bad weather has a domino effect on this industry.
 
Then, of course, the issue is the overbooking by sales results in our need to ‘walk’ our guests, or, mildly put, ensure they are persuaded to stay in other equivalent hotels at our expense, because we could not accommodate them! For a self-paying guest, such a situation was profitable, because, the hotel expense for the night was saved, but, the smart and experienced traveller would always turn around and say: “I am going to suffer by this change; so what I do get or how do I get compensated for this trouble?”  It would then be left to the discretion of the handling associate/supervisor, who would offer bonus points, a free stay coupon or a dinner voucher.
 
Our night auditors, who operated the “grave-yard shift” from 11.00pm till 7.00am the next morning, always faced this music. Most of the time; in order to over this trouble, both the day and the afternoon shift supervisors took the responsibility of making standby bookings in nearby hotels, if rooms were available, so that, instead of passing this unpleasant task to the night auditors and give trouble to guests who arrived late at night, we managed to persuade a few willing guests during the evening itself.
 
I distinctly recall one occasion, where we already had couple of snow falls, some 5 to 7 inches with couple of days’ interval; snow was still on the ground and one more snowstorm was predicted for the night. Our coach service to the airport ceases at 10.30 at night, and starts at seven in the morning. Only when we have a group of seven to 10 guests request a 6 O’clock airport drop, we arranged for the driver to be present. In this particular case, after we had confirmed requests for cabs by various guests, to arrive between six and 6.15, we had made bookings with our regular cab companies.
 
When Maria, the night auditor turned up by 10.30; she was always very punctual, she received the message that her colleague, the second auditor, called off because his area, in Maryland, was already snowing. So, I volunteered to take care of the front office, while she prepared for the evening. And I decided to stay back in the hotel that night because I was on a back-to-back shift and had to work starting at 7.00am! By about 1.00am I went to my suite to sleep and had dozed off immediately because I had reported for duty at mid day that day. Already, it was a long day and I was very tired.
 
I think I had hardly slept, when I received the phone call from Maria, saying, “Ram, I need you to come down and take a guest to the airport immediately, as the cab drivers have called off and the cab company do not have drivers”. It was a frantic call, I came down as fast as I could but our coaches would take at least 10 minutes before they get warmed up in the freezing weather!.  Mind you, I had to be in my uniform but I simply went down to the garage, picked up my car, and brought it up; apologized to the guest and his family and drove them to the airport. In the meantime, there were frantic calls from the airline asking for this guest! Because of the heavy snow I had to drive very carefully and I dropped them off at gate No: 9.There was already a uniformed person standing there who looked like the aircraft captain; my passengers thanked me, gave me a big tip and were immediately rushed to the waiting aircraft. Later on, we came to know that he was one of the captains whose services (or presence, I suppose) were urgently required at the destination. It had stopped snowing by then, but there was a lot of snow on the ground!
 
For performing this duty, I was named the employee of the month!

(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce and was associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts. From being the advisor to exporters, he took over the mantle of a trader, travelled far and wide, and switched over to setting up garment factories and then worked in the US. He can be contacted at [email protected].)

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