Auto, electronic appliance makers gung-ho over festive season bonanza as GST rate cuts bring consumers to showrooms

New Delhi: Car makers, dealers, consumer durables and electronic appliances retailers and manufacturers are gung ho over the prospects of a festive season bonanza in the wake of GST 2.0 lighting up consumer sentiments with some vehicle and AC makers already recording impressive single-day sales on the first day of Navratri.

Tata Motors on Tuesday said its dealers retailed around 10,000 passenger vehicles on the first day of Navratri, which coincided with the kicking in of the reduced GST rates regime, while also recording over 25,000 customer enquiries at its passenger vehicle dealerships across the country.

It joined the likes of Maruti Suzuki, which retailed around 30,000 units and Hyundai about 11,000 dealer billings, its highest single-day performance in the last five years, on Monday.

"We have seen that a lot of inquiries are happening. A lot of customers are coming into our showrooms and they want to shop. We are super gung ho about the fact that the growth is there, and all of us are going to be part of this whole growth story," Federation of Automobile Dealers Associations (FADA) President CS Vigneshwar told PTI.

He was responding to a query on consumer sentiments and how the festive season sales have taken off after the new reduced GST regime came into effect from Monday.

Expressing similar sentiments, Society of Indian Automobile Manufacturers (SIAM) President Shailesh Chandra said, "The start to this festive season has been extremely encouraging. The recent GST reduction and special festive offers have sparked an extraordinary wave of consumer interest and enthusiasm."

Chandra, who is also the MD of Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd, further said in just the first two days, auto dealerships nationwide are witnessing unprecedented walk-ins, a surge in enquiries, and record deliveries across most segments.

"We are hopeful that this celebratory momentum will continue, making this festive season one of the most memorable for the industry and consumers alike," he added.

For the automotive sector, Vigneshwar said with GST 2.0, the structural issues faced by entry-level two-wheelers and small cars due to affordability issues will be "a thing of the past".

"For long, we've been having issues regarding the entry-level two-wheelers and entry-level four-wheelers but with this (GST) rejig, I think that is going to kick start the entry level. The entry level had the most amount of impact in terms of what was happening and what was not...The prices have fallen the biggest in the entry-level segments, both for two-wheelers and four-wheelers, and it will start doing well," he added.

In the consumer durables and appliances segment, Vijay Sales Director, Nilesh Gupta, said, "Although Mondays typically draw fewer customers, yesterday our stores saw a significant rise in activity, with delivery volumes reaching nearly twice the usual daily average."

This increase was anticipated, given that sales over the past few weeks had remained below 50 per cent, he said, adding, "We expect momentum to build from this point forward, as consumers now enjoy greater flexibility in discretionary spending and are likely to make multi-product purchases."

Panasonic Life Solutions India Pvt Ltd Business Head- AC Group Abhishek Verma said the company's AC business has registered a record start to the festive season, fueled by the GST reduction on ACs from 28 per cent to 18 per cent and attractive consumer offers.

"The company achieved single-day RAC (residential AC) sales surpassing 7,000 units while posting 50 per cent growth in the offline channel, a strong reflection of the positive consumer sentiment and market traction," he added.

Godrej Enterprises Group, Business Head and EVP at Appliances Business Kamal Nandi noted that while it is too soon to be able to estimate sales impact owing to GST reduction, trade has been positive with some stores opening for longer hours as well.

"It has been raining in many parts of the country as well. In parts where it hasn't rained much, we have seen more traction across appliances at modern trade outlets in city markets. However, it will be prudent to wait longer to be able to assess the market sentiments," he said.

Stating that a lot of communication around GST reduction is happening on shop floors to educate consumers, in close collaboration with trade partners, Nandi said, "The industry is hopeful of good festive sales as we progress into the festive season."

Similarly, a spokesperson of LG Electronics India Ltd said while it is "too early to share specific data as 22nd Sep was the first day of the new GST rates coming into effect. But early trends are definitely encouraging and point to positive consumer sentiment, the momentum of which we expect will continue going forward as well."