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Consumer brands, auto, realty on a wing and a prayer this Diwali

Companies are seeing an uptick in spending on fashion brands, electronic items, auto and even in real estate

twitter-logoBusinessToday.In | October 26, 2019 | Updated 00:37 IST
Consumer brands, auto, realty on a wing and a prayer this Diwali
Shoppers throng Delhi's Sadar Bazaar ahead of Diwali. Photo credit: PTI

Consumer businesses across consumer durables, apparel, auto and real estate and malls are on a wing and a prayer-hoping for a revival this Diwali. There's hope, after all, which could potentially bring cheer to marketers hit by a severe downturn. Upbeat over the Modi government's recent efforts to bring the economy back on track, companies across segments are pulling all stops to rake in maximum sales to make up for their losses. Companies are seeing an uptick in spending on fashion brands, electronic items and even in real estate. Though the overall consumer sentiment remains weak, it's still not holding them back from making small spending on clothing items or eating out with restraint.

Auto industry, which has been hit the most due to the ongoing slowdown, also seems to be on the recovery path. While the sector, following 11 straight months of decline in the domestic passenger car industry, may not see bumper festive season this year, companies could be successful in reversing the declining sales trend. From market leader Maruti Suzuki to Toyota and Hyundai, all are eying an uptick in sales in on the back of auspicious days.

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Real estate companies which are facing a consistent lack of demand for months, are also hoping for some revival in housing sales on offering new launches and freebees like the waiver of stamp duty and registration charges, etc. Recent measures by the Centre, including the Rs 20,000-crore fund for affordable and middle-income housing projects and reduction in the corporate tax rate, could also play a big role in drumming up housing sales.

Here's what consumer firms, auto and real estate are expecting this Diwali.

Mixed bag for brands

Though the consumer sentiment is weak during this festival season, companies are hoping that Diwali will bring some positive news. "The peak (level of sales) that used to starts 10 weeks before Diwali picked up only 10 days before the festival and that is a cause of worry," says Rajiv Malla, CEO, R City Malls by Runwal Group, adding that he hopes "Diwali will be positive, not as positive as we anticipated but definitely not as bad."

ALSO READ:It's a mixed bag for brands across categories this festive season

Pushpa Bector, Executive Vice President and Head, DLF Shopping Malls who is responsible for five properties across the Delhi National Capital Region (NCR) and Chandigarh (such as DLF Mall of India, DLF Promenade, DLF Place, DLF Cyber Hub and DLF City Centre) says there's an increase in footfalls and also in sales. "...people don't want to dip their quality of life people who change wardrobes continue to do so," says Bector. Consumer electronics leaders like Samsung are also excited.  However, it seems a mixed bag for brands in the discretionary category. Ravi Saxena, MD of Wonderchef says there is 1-2 per cent degrowth at the overall industry level.

Auto industry hopes to reverse declining trend

Despite seeing 11-month of continuous decline in sales, there has been an uptick, both in enquiries and actual sales ahead of Diwali -- September was better than August and October so far has been better than September. However, with Navratri out of the way, what is certain is that a bumper festive season is not to be this year. "Sales in October this year will be comparable to what we did last year," says RC Bhargava, Chairman, Maruti Suzuki India Ltd, adding that "both in retail and wholesale, October looks okay but that does not mean we are out of the woods yet."

ALSO READ:Slowdown Blues: No bumper festive season for auto industry but declining trend may be arrested

Last year, the industry witnessed its worst festive period in 5 years as retail sale of passenger vehicles had declined by 14 per cent for passenger vehicles and 12 per cent for two-wheelers. Matching the same volumes would still mean a low key festive season but no decline could be an indication that the worst of the times may be behind. N Raja, Deputy Managing Director, Toyota Kirloskar Motor, says "The industry expects improvement in customer demand in October with the Dussehra and Diwali festive cheer."

The sentiment in the two-wheeler industry is more downcast. Dealers, however, say the problem is less with enquiries and footfalls now and more with the conversion.

Realtors expect 10% sales growth

Irresistible offers couple with extra surety of getting possession in time is giving a fillip to the otherwise lacklustre realty market this festive season. "With proactive deal-sweetening by developers and various government interventions, the stage is hopefully set for the last quarter of 2019 to witness increased housing sales," says Anuj Puri, Chairman, Anarock Property Consultants.

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Poddar Housing and Development is bearing costs of registration and stamp duty for buyers in its affordable housing projects. "One of the key reasons homebuyers wait for the festive season is the discounts and lucrative offers given by the developers. Buyers can avail home loans up to 95 per cent in our projects. These offers will help in making the effective price more affordable for the buyers," says Rohit Poddar, MD of Poddar Housing.

Similarly, in NCR, Nirala World is offering waiver of stamp duty and registration charges besides car parking, wardrobes, modular kitchen and power back up in its project at Greater Noida West. Poddar says this festive season is expected to drum-up the stagnant sales because the government has taken a slew of measures to make home loans cheaper for home buyers.

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