Will the festive season ring in the much needed cheer for the auto industry?
The total production of passenger vehicles, three wheelers, two wheelers and quadricycle in the month of July 2020 stood at 1,715,514 units, as against 2,428,518 units in July 2019, registering a de-growth of (-) 29.36 per cent, as per the Society of Indian Automobile Manufacturers (SIAM). While the auto industry has been facing challenging times even before COVID-19 struck, the pandemic has resulted in this industry witnessing degrowth. Sales are down as well, with SIAM reporting that passenger vehicles sales was 336,513 units in April-July 2020, compared to 902,799 units in April-July 2019, down by (-) 62.73 per cent. Two-wheeler sales was down by (-) 60.54 per cent in April-July 2020 at 2,574,467 units, compared to 6,524,784 units in April-July 2019.
With the unabated increase in COVID-19 cases in the country and lockdowns still continuing in different phases across states, the pandemic pressure will continue to hit the auto industry.
Meanwhile, in a release issued, Rajan Wadhera, President, SIAM, stated, “After few consecutive of months of plummeted sales in a post-COVID scenario, there are signs of Green-Shoots in passenger vehicles and two-wheelers, where the year-on-year de-growth is much lesser than the previous months. The sales numbers in the month of August would indicate if this is a sustainable demand and not just a pent-up demand.”
But do auto majors share his optimism? How are they creating engagement for customers in times of social distancing? How are the Tier 2 and 3 markets spurring demand? Will the festive season give a boost to sales? Adgully spoke to some leading auto players to gauge the market sentiments and how they are looking at a rebound.
Elaborating on how his company has been keeping their consumers engaged in COVID times, Rahul Pansare, Head of Marketing and PR, FCA India (Jeep), said, “We initiated many digital campaigns to ensure a high recall for the Jeep brand. One of the campaigns close to my heart was the #WFHHeroes or Warriors For Humanity Heroes, which was an opportunity for us to showcase the social work that the Jeep Community was doing to help frontline workers during the pandemic. This advocacy campaign reached over 30 million social media users, with active engagement with 350,000 people. The #WFHHeroes campaign videos generated views of over 9.4 million and were shared 226,000 times on social media. Besides this campaign, we had rolled out the Jeep Fanatics Quiz, #StayingIndoors Challenge and #IndoorAdventures. To make booking and buying Jeep easy for customers, we introduced ‘Book My Jeep’, our online retail platform which is equipped to aid customers from the bookings to purchase process by following simple steps from the comfort of their homes.”
While COVID-19 has affected all businesses in the last few months, brands are seeing a revival as India Unlocks. The auto industry, especially passenger vehicle, is witnessing a month on month growth in bookings and retails, which is currently around 80-90 per cent of pre-COVID levels, as per industry data. Smaller towns are leading the growth in demand in the automobile sector as compared to the metros and Tier 1 cities.
Vivek Srivatsa, Head – Marketing, Passenger Vehicle Business Unit, Tata Motors, informed, “At Tata Motors, we are seeing more active buyers from the smaller cities and, therefore, our strategy too is focused accordingly. Our marketing campaigns have also gone regional, where we communicate in the local language addressing regional requirements, thus getting closer to the customers. This helps us to communicate more effectively while also building trust in the brand.”
With customers reluctant to step out of their homes due to the pandemic, a primary challenge for the auto industry is to get the customers to visit the showrooms and dealerships. To address this issue, the auto industry has turned to digital and innovation in a big way.
Explaining how Honda has been reaching out to its customers during these times, Yadvinder Singh Guleria, Director – Sales & Marketing, Honda Motorcycle & Scooter India, said, “We know that we are in the era of contactless customers and that is why including our network as well as the corporate level marketing at Honda, we have enhanced our digital capability in the last three months. We also started our online platform for our customers to provide the trust and transparency and booking their Honda two wheelers.”
Pansare added here, “Our digital retail platform – ‘Book My Jeep’ – has been up and running since May. Customers can book their Jeep online and go all the way to purchasing it on Book My Jeep, which is easy to use. The Book My Jeep system is designed in such a way that any customer can place a booking and the system automatically geo-target the customer’s location and also informs the local dealer there about the interest. We offer test drives and deliveries at customers’ doorstep, should they opt for it.”
Customers are not only looking for more offers now, but also proper sanitization and safety measures. Tata Motors has launched on-ground initiatives such as ‘Sanitised by Tata Motors’ to assure customers that the highest standards of safety are being followed in their car dealerships nationwide.
Speaking about the initiative, Srivatsa said, “As part of this initiative, customers will receive a fully sanitised vehicle from Tata Motors dealerships. Especially designed labels confirming ‘Sanitised by Tata Motors’ will be pasted on the vehicle post sanitisation, and the vehicle will remain untouched by the dealership teams until it’s delivered to the customer.”
This year’s festive season is going to be an important time for the auto industry looking for a rebound. Speaking about Honda’s strategy for the festive season, Guleria said, “We are preparing hard at the ground level along with our dealer partners, network partners, even in terms of broader offerings, we are expanding our product portfolio well before the festival, our production along with our supply chain is working very hard, despite its migrant labour issue. We are ensuring that our customer can buy their favourite two wheeler vehicle during the festival time.”