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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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Cyber Monday- The Online Shopping Holiday After Thanksgiving

US shoppers flock to internet for deals on cyber Monday

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Mobile shopping
A mobile screen displaying an online shopping website. Pixabay

By Michelle Quinn, Matt Dibble

Created 14 years ago, Cyber Monday, the online shopping holiday the Monday after Thanksgiving, seems like a relic from a different digital era.

Cyber Monday gained popularity as a day for eye-popping online sales, coming three days after Black Friday, traditionally the busiest day of the year for brick-and-mortar stores.

At the time, digital shopping was still new for many. Cyber Monday’s pitch was to get mall-weary U.S. consumers to use their workplace computers and employers’ internet connections to keep America’s holiday shopping frenzy going — online.

Today, online stores don’t really need the help of a special U.S. shopping day as they once did, retail experts say. Each year, digital sales slowly but surely eat into a bigger chunk of traditional store sales than they did a year earlier. Shopping on mobile phones is growing fast, particularly among younger consumers. Whether it be for smartphones, authentic watches or even other electronics, people usually prefer online shopping over physical shopping.

Now the entire Thanksgiving weekend is known by some retail experts as the Cyber Five. In one recent survey, 54 percent of U.S. consumers said they would do most of their holiday shopping online, according to The Washington Post.

Online shopping
Today, online stores don’t really need the help of a special U.S. shopping day as they once did. Pixabay

“This Cyber Monday we will see more and more sales,” said Mark Lewis, CEO of Netalico, an e-commerce consulting firm. “More and more people will migrate to shopping online than shopping in stores.”

Online shopping pros, cons

Online shopping can be convenient and fast but also tedious and impersonal.

In-person shopping can be more visceral, but it also means battling crowds, parking hassles and long lines at the register.

“I prefer to shop in brick-and-mortar stores because I’m someone who likes instant gratification,” said Cortney DeMello, a shopper and retail worker. “I want to be able to walk in, take things out and leave with them.”

Retailers and shoppers alike are increasingly blending their digital and in-store experiences.

Tucked in an alley off a main shopping area in San Francisco, Re:Store, where DeMello works, offers clothing and jewelry that are mostly available online and have become popular on Instagram.

“Our slogan is ‘for people who like touching things,’ because it’s all these Instagram brands that you could shop in real life,” she said.

Another store, B8ta, sells electronics and other products in a showroom at a time when such merchandise increasingly is purchased online.

Digital shopping
Online shopping is extremely fast and convenient. Pixabay

“This is a retail store where we focus on showing off products primarily found online,” Jake Cardin, a merchandise manager with a B8ta store, said.

If a B8ta shopper likes a digital translator but buys it from Amazon on Cyber Monday, that’s OK for B8ta. The store shares its data with the companies behind the products.

Cameras in the ceilings and over the doorways measure the number of bodies in the space, giving companies information about how anonymous shoppers spent time with their products.

Technology in shopping

Cyber Monday is a time for many online stores to try out new technology, retail experts say. Some stores such as Ikea, the furniture chain founded in Sweden, use augmented reality so a shopper can see what a chair might look like in their living room.

Chat bots, preprogrammed online assistants, answer shoppers’ questions in a breezy demeanor.

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“It’s not human, but they’ve been able to emulate a human so well and provide so much information to that bot, it gives the customer a very good experience if they have questions about shipping or returns,” Lewis said. “Sometimes you can’t even tell it’s a chatbot at first.”

During Cyber Monday, chatbots and deep price discounts aim toward a single goal: getting consumers to look and eventually click “buy.” (VOA)