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Sagging Auto Sector Sales Show Signs of Revival on Account of Depreciation Benefits and Heavy Discounts

The market is yet to see the recovery mode set in

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Auto, Sales, Depreciation
New introductions have also been instrumental in the slight recovery in passenger car and two-wheeler sales in September 19 over August 19, while the YoY numbers indicate the extremely cold nature of the market. Pixabay

Sagging auto sector sales showed signs of revival in September on account of depreciation benefits and heavy discounts.

“Depreciation benefits and discounts have helped a little bit in increasing sales in September in comparison to August,” said Sridhar V., Partner, Grant Thornton India LLP.

“New introductions have also been instrumental in the slight recovery in passenger car and two-wheeler sales in September 19 over August 19, while the YoY numbers indicate the extremely cold nature of the market. The market is yet to see the recovery mode set in.”

Additionally, the immediate price reduction due to lowering of effective corporate tax rate to 25.17 per cent (inclusive of all cess and surcharges) from 30 per cent for all domestic companies has helped to deepen discounts and drive-in some extra sales numbers.

Auto, Sales, Depreciation
Depreciation benefits and discounts have helped a little bit in increasing sales in September in comparison to August. Pixabay

In August, Finance Minister Nirmala Sitharaman announced several measures to boost the sector, including lifting a ban on purchase of vehicles by government departments, and allowing additional 15 per cent depreciation on vehicles bought till March 2020 among others. The decisions are likely to sustain the trend for a few more months.

According to Fitch Ratings Associate Director Snehdeep Bohra, the recent interest rate cut and lower base effect will help stabilise the YoY auto sales in October.

“What is really important is to pass on the interest rate cut to the customers. New launches ahead of the festival season, including BS6 compliant versions, are also going to support the sales momentum,” said Bohra.

However, some industry insiders contend that mitigated decline in sales on a MoM basis has been caused due to wholesale adjustment, since dealerships were over-stocked for the last couple of months. Effectively meaning that the dealers stopped buying from OEMs to reduce the stock pile-up.

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The auto industry is facing a severe demand slowdown on account of high GST rates, farm distress, stagnant wages and liquidity constraints.

The sales and production have plunged dramatically, leading to job losses. In August, all major Original Equipment Manufacturers (OEMs) comprising passenger, commercial, two and three-wheeler manufacturers reported massive decline in domestic sales.

As per the Society of Indian Automobile Manufacturers’ (SIAM) August sales figures, the overall sectoral offtake in the domestic market plunged 23.55 per cent to 1,821,490 units, from 2,382,436 units sold during the corresponding month of the previous year. September sales results are awaited.

Moreover, the industry has estimated that around 15,000 contractual manufacturing jobs have been lost and another million are at risk if the slowdown is not reversed. (IANS)

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Lockdown Diaries: Online Sales of Gardening Products Shoot Up

Online sales of gardening products hint at home-gardening bloom in lockdown

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Lockdown
Many Indians have turned into gardeners during lockdown. Pixabay

By Siddhi Jain

Two months of lockdown has turned many Indians into avid gardeners. As people explore their green side by growing a variety of plants, sales of gardening products on an e-commerce site seem to have shot up notably in this period.

As per Snapdeal, the overall sale in the gardening category for mid-March and mid-May 2020 is more than double the sale in the same time-frame last year.

“Over the last two months, users have bought seeds to grow a range of vegetables including brinjals, bottle gourd, bitter gourd, chilli, coriander etc. Seeds of everyday-use items like lemon and tomato were the most searched for seeds on Snapdeal. Combo vegetable seeds pack with multiple varieties of seeds priced under Rs 300 was another popular pick amongst Snapdeal shoppers,” the online marketplace told IANSlife.

poppyseed-Lockdown
People have bought a variety of seeds amid lockdown. Pixabay

What made it to e-carts and search bars?

As kitchen gardens blossomed, so did a collective desire to build immunity against the novel Coronavirus.

Since late April, Moringa (drumstick) seeds remained high in demand for immunity-boosting properties.

For those looking at summer flowers, Roses, Zinnia, Petunia and Marigold have been a top pick, since they grow well in summers.

Enthusiastic gardeners also bought a range of supplies including garden tool kits comprising trowels (‘khurpi’), clippers and weeding forks, green net to save plants from birds, spraying can, and seedling trays, Snapdeal shared.

gardening-Lockdown
Many enthusiastic gardeners also bought a range of supplies including garden tool kits. Pixabay

Apart from greening lawns and balconies, people also bought indoor plants like money plant, areca palm, rubber plant, and fiddle-leaf fig. Succulents were also widely searched and liked but seldom bought due to its high maintenance nature and difficulty to survive Indian weather conditions, the e-commerce platform said.

When it came to pots, plastic pots in a variety of shapes, colour and sizes were in high demand and the popular price range of these were Rs 50-250. Most users bought multi-packs of 4-12 pots. Traditional terracotta pots were also searched for but were not available due to difficulty in transporting the same. Grow bags which are a cheaper alternative to pots were a hit too, Snapdeal said.

“Gardening is a fun and relaxing way to get in touch with nature. In the lockdown period, we saw increased interest from our shoppers in this category, as they spent more time at home. From the nature of buying, we can infer that users are attempting to grow everyday use fruits and vegetables at home. Our sellers also received queries for bulk supplies from those users who intend to grow organic produce for regular commercial sale. Seeing the demand, we have onboarded new sellers in this category to ramp up supplies,” a Snapdeal spokesperson told IANSlife.

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Regional demand

Seaweed solution bottles were popular gardening picks among the metro audiences to save the trouble of keeping packets of compost. The non-metro audience, on the contrary, continued to buy compost. Cocopeat, which can absorb water for longer than normal soil, was widely bought in north India to beat the sun.

Shoppers from Tier 2 cities bought most of the gardening supplies. Most orders came from Bhopal, Chandigarh, Nagpur, Dehradun, Gurgaon, Jamnagar, Lucknow, Mysore, Ranchi and Raipur.

Orders for some of these items were placed mostly when deliveries of these products were prohibited and are now being delivered post the lockdown restrictions being removed, the brand said. (IANS)

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Smartphone Sales Witnesses Significant Decline in India Amid Lockdown

The month of March saw a steep annual decline in smartphone shipments, at -19 per cent, due to COVID-19 nationwide lockdown that settled in from March 24

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Samsung
The month of March saw a steep annual decline in smartphone shipments, at -19 per cent, due to COVID-19 nationwide lockdown that settled in from March 24. Wikimedia Commons

The extended lockdown in India has resulted in zero shipments for the smartphone players in India in the month of April as factories are shut and it will take two-four weeks time for the manufacturing units to resume normal operations once lockdown is relaxed.

The month of March saw a steep annual decline in smartphone shipments, at -19 per cent, due to COVID-19 nationwide lockdown that settled in from March 24. Since then, factories are closed, retail shops are shut and online sellers are busy delivering groceries and other essential items.

Result: April has seen almost zero sales.

“We see zero activity on smartphone shipments part in April and lockdown now entering May amid uncertainties, the Q2 2020 is going to be real challenging for the smartphone makers in the country,” Tarun Pathak, Associate Director, Counterpoint Research, told IANS.

“We have been hearing some absolute essential sales happened behind the scenes during the lockdown but yes, those will be in hundreds as against potential 11-12 million smartphone sales which happen in a normal month,” Pathak added.

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All smartphone brands — from Samsung to Xiaomi to Realme — suspended manufacturing/assembling at their respective plants in the country almost from March 20 onwards. At Realme, there has been a complete suspension on sales and manufacturing since the first 21-day lockdown was announced.

“As per the government directives, our Greater Noida facility in Uttar Pradesh suspended operations from March 21, along with sales coming to a halt. We also postponed our Narzo series launch event and a few Artificial Intelligence of Things (AIOT) products that were scheduled for April,” Madhav Sheth, Vice President, Realme and Chief Executive Officer, Realme India, told IANS.

Samsung
The extended lockdown in India has resulted in zero shipments for the smartphone players in India in the month of April as factories are shut and it will take two-four weeks time for the manufacturing units to resume normal operations once lockdown is relaxed. Pixabay

“The bigger uncertainty comes on the demand side. If the nation’s economy and people’s income got hampered, then the smartphone demand in 2020 may not be optimistic. We will need to evaluate further how the economy recovers post the market reopen,” Sheth added. In a mobile-first nation, the mobile is a crucial gateway that empowers consumers with communication as well as education, retail, payments, entertainment.

According to Prabhu Ram, Head-Industry Intelligence Group (IIG), CMR, during the lockdown, consumers with faulty phones were in a quandary as they could not replace or repair it. “Retailers lost out on a window of over five weeks without any sales. Once we move beyond the lockdown, we will see a reset in retail strategies, with social distancing norms in place. Online channels will seek to attract consumers with discounts to clear existing inventory,” Ram told IANS.

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“Over the mid- and long-term, online to offline will emerge as a sustainable strategy, with consumers placing orders online and fulfilling it at offline retail stores,” he added. If lockdown persists for the month of May while staggered opening of the economy takes it own sweet time, smartphone makers will have no option but to write off Q2 2020 from their list — a big blow amid supply-demand uncertainty that may last for several months, usurping the all-important festival season. (IANS)

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Global Smartphone Market Witnesses Substantial Decline Due To Coronavirus Pandemic

Apple remained resilient even during the COVID-19 as iPhone shipments declined only 5 per cent year-on-year during the quarter

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Samsung
The ongoing effect of the pandemic on the smartphone market is likely to be worse in the second quarter. Pixabay

The global smartphone market declined its fastest ever, down 13 per cent year-on-year in Q1 2020, driven mainly by the impact of COVID-19 in the China market which was the initial epicentre of the pandemic, said a new report.

Samsung led the smartphone market during the quarter capturing one-fifth of the global smartphone shipments, said the report from Counterpoint Research. This is the first time since Q1 2014, that the smartphone market has fallen below 300 million units in a quarter.

The ongoing effect of the pandemic on the smartphone market is likely to be worse in the second quarter, said the report. Huawei continued its push in China and surpassed Apple again during the quarter to capture the No. 2 position in the global smartphone market.

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The company captured 17 per cent share of the global market, while Apple grabbed 14 per cent. Apple remained resilient even during the COVID-19 as iPhone shipments declined only 5 per cent year-on-year during the quarter. Xiaomi and Oppo rounded up the top five vendors, according to Counterpoint Research.

By the end of the quarter, as COVID-19 started to spread to other regions, and lockdowns of varying severity were imposed, the pendulum of disruption started to swing from supply to demand, said the report.

Smartphone
The global smartphone market declined its fastest ever, down 13 per cent year-on-year in Q1 2020, driven mainly by the impact of COVID-19 in the China market which was the initial epicentre of the pandemic, said a new report. Pixabay

“From the consumer standpoint, unless replacing a broken phone, smartphones are mostly a discretionary purchase. Consumers, under these uncertain times, are likely to withhold making many significant discretionary purchases,” Tarun Pathak, Associate Director at Counterpoint Research, said in a statement.

This means the replacement cycles are likely to become longer,” he added. While 5G smartphone shipment share increased to 8 per cent in Q1 2020 from 1 per cent in Q4 2019, COVID 19 has also impacted the pace of 5G rollouts in some countries.

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“COVID-19 has disrupted the implementation plans of 5G in some countries, with auctions being postponed in markets like Spain and India. However, led by Huawei, the growth of 5G in China remains as expected,” said Varun Mishra, Research Analyst at Counterpoint Research. (IANS)