Even as pent-up demand wanes, auto major Toyota Kirloskar Motor (TKM) is optimistic about the future growth trajectory via low-interest rate regime, promotional offers as well as India's sound economic fundamentals. Apart from Covid-19 related struggles, the company has faced labour issues lately. Nonetheless, it has managed to hold the fort on the back of a steady rise in sales numbers and optimising its production levels.
In a conversation with IANS, Toyota Kirloskar Motor's Senior VP (Sales and Service) Naveen Soni attributed the steady recovery over the last few months to factors such as pent-up demand, festive season, consolidation of the market at the lower end due to increasing preference for personal mobility, and attractive offers and schemes unveiled by auto OEMs in association with banks and NBFCs.
In the just-concluded festive season, TKM witnessed a 10 to 13 per cent increase in orders on Dhanteras compared with the same period last year. This year, Dhanteras was celebrated over two days across the country and hence in terms of retail sales too, the company witnessed a 12 per cent growth when compared with Dhanteras in 2019.
However, with the end of the festive season and pent-up demand tapering off, the company is counting on the rising need of personal mobility, low-interest rates, along with the variety of schemes, to propel sales.
"We have already witnessed a decline in demand created due to pent-up demand from 36 per cent in the earlier months to around 20 per cent in November," he said.
"The festive demand was expected to last until around the end of November. For sustenance, the consolidation of the market at the lower end due to rising personal mobility issues and the variety of schemes and offers by auto OEMs need to continue."
Besides, he pointed out that low-interest rate and access to various finance offers played a vital role in incentivising and converting enquiries into sales. On its part, TKM had announced special offers for salaried customers, with benefits for employees of both the government as well as private organisations.
In addition, Soni anticipated that the automobile industry and the economy at large will witness periodic issues caused to the pandemic from time to time until a massive vaccination drive is implemented in the country.
"We are constantly monitoring the emerging trends and assisting our dealer-partners in inventory management, maintaining liquidity, and improving cash flow so that their financial health remains good."
"However, having said that, the fundamentals of the Indian economy are very strong and the recovery curve is rising steadily as shown in various economic indicators and trackers."
The company sold 12,373 units in October 2020, clocking a growth of 52 per cent when compared with the wholesales in September 2020. It had sold 11,866 units in the domestic market in October 2019 and exported 744 units of Etios as well.
At present, the company has two plants in India and offers Innova, Fortuner, Yaris, Camry Hybrid, Glanza, Vellfire, and Urban Cruiser.