NEW DELHI // Indian car buyers are being bombarded with "buy now, pay later" offers after once-booming sales skidded to a 12-year low, highlighting the struggle to stimulate consumer demand in a sagging economy.
"Go ahead, pinch yourself," says an ad for German giant Volkswagen's 726,000-rupee (Dh49,220) Vento sedan, giving buyers a chance to trade in their old car, make a one-rupee down payment and start paying for the new one a year later.
Other offers dangled include interest-free repayments and up to 20 per cent discounts to lure buyers back into showrooms and reduce unsold vehicle pile-ups in Asia's third-largest car market.
"The slowdown has forced automakers to cut prices and offer massive discounts to move the metal," Ammar Master, the India manager at global industry forecaster LMC Automotive, said.
Passenger-car sales fell 26 per cent from a year earlier in February alone, the worst performance since 2000, and are projected to record their first full-year dive in a decade in the financial year that ended yesterday, according to the Society of Indian Automobile Manufacturers (Siam).
Sugato Sen, Siam's deputy director general, blames India's sharp economic slowdown in which growth is expected to be just 5 per cent this year - the weakest in 10 years.
"If people don't have to buy a car, they aren't buying, they're holding back on discretionary spending," he said.
The downturn in India's car market comes as sales in China, the world's biggest market, have been gaining traction - highlighting the divergence between the two billion-plus-population nations.
China "keeps running out of [manufacturing] capacity in contrast to India where manufacturers right now are facing an excess capacity situation," said Deepesh Rathore, the India managing director of the industry forecaster IHS Automotive.
Current car sales are a sharp reversal of scorching growth in the years up to 2010-11, when sales expanded by 20 to 30 per cent annually, luring foreign automakers into the nation to offset weakness in developed markets.
They poured billions of dollars into plant investment but now are seeing the market shrink at a time when European sales have been contracting dramatically due to the eurozone crisis.
Ford, which has been betting big on India, reported its February Indian sales slid by 44 per cent to 4,490 units, citing a "tough" market. GM's domestic sales fell 20 per cent to 7,106 units while Volkswagen's sales were down 8 per cent.
But Tata Motors, India's largest domestic vehicle maker and producer of the world's cheapest car, the Nano, suffered most, announcing passenger car sales down 70 per cent in February.
RC Bhargava, chairman of the Japanese-controlled carmaker Maruti Suzuki, which sells around one out of every two cars in India, said last week he did not want to fan "any optimism" and forecast next year would not be "any different".
"The industry is not going through a good phase," he said. "The trend can change only with better economic growth and more money in the hands of people."
To reduce inventories, automakers have been shutting production lines but investment slowdowns loom if the situation fails to improve, analysts warn.
Analysts say the market's woes reflect a wider malaise in the economy, plagued by weak consumer demand, stubbornly high inflation, high interest rates and a subsidy-swollen fiscal deficit.
"People aren't getting the right vibes from this economy" to buy cars, Mr Rathore said.
The lone bright spot has been sales of SUVs, which have become hugely popular with affluent consumers seeking a status vehicle offering more protection on India's lethal roads. SUV purchases soared 35 per cent in February.
The French carmaker Renault, which re-entered India's market just two years ago, has fared specially with its 775,000-rupee Duster SUV that lifted its total car sales tenfold to 6,723 units in February.
Longer term, India and its BRICS peers - China, Russia and Brazil - are still seen as the industry's future.
"The headroom in the Indian industry is tremendous," said Siam's Mr Sen, noting that just 12 out of every 100 Indians own a car.
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INFO
Everton 0
Arsenal 0
Man of the Match: Djibril Sidibe (Everton)
The Perfect Couple
Starring: Nicole Kidman, Liev Schreiber, Jack Reynor
Creator: Jenna Lamia
Rating: 3/5
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Tips for newlyweds to better manage finances
All couples are unique and have to create a financial blueprint that is most suitable for their relationship, says Vijay Valecha, chief investment officer at Century Financial. He offers his top five tips for couples to better manage their finances.
Discuss your assets and debts: When married, it’s important to understand each other’s personal financial situation. It’s necessary to know upfront what each party brings to the table, as debts and assets affect spending habits and joint loan qualifications. Discussing all aspects of their finances as a couple prevents anyone from being blindsided later.
Decide on the financial/saving goals: Spouses should independently list their top goals and share their lists with one another to shape a joint plan. Writing down clear goals will help them determine how much to save each month, how much to put aside for short-term goals, and how they will reach their long-term financial goals.
Set a budget: A budget can keep the couple be mindful of their income and expenses. With a monthly budget, couples will know exactly how much they can spend in a category each month, how much they have to work with and what spending areas need to be evaluated.
Decide who manages what: When it comes to handling finances, it’s a good idea to decide who manages what. For example, one person might take on the day-to-day bills, while the other tackles long-term investments and retirement plans.
Money date nights: Talking about money should be a healthy, ongoing conversation and couples should not wait for something to go wrong. They should set time aside every month to talk about future financial decisions and see the progress they’ve made together towards accomplishing their goals.
South Africa World Cup squad
South Africa: Faf du Plessis (c), Hashim Amla, Quinton de Kock (w), JP Duminy, Imran Tahir, Aiden Markram, David Miller, Lungi Ngidi, Anrich Nortje, Andile Phehlukwayo, Dwaine Pretorius, Kagiso Rabada, Tabraiz Shamsi, Dale Steyn, Rassie van der Dussen.
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Roll of honour 2019-2020
Dubai Rugby Sevens
Winners: Dubai Hurricanes
Runners up: Bahrain
West Asia Premiership
Winners: Bahrain
Runners up: UAE Premiership
UAE Premiership
Winners: Dubai Exiles
Runners up: Dubai Hurricanes
UAE Division One
Winners: Abu Dhabi Saracens
Runners up: Dubai Hurricanes II
UAE Division Two
Winners: Barrelhouse
Runners up: RAK Rugby
The%20Specs
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BEETLEJUICE BEETLEJUICE
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Director: Tim Burton
Rating: 3/5
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Stars: Paul Walter Hauser, Sam Rockwell, Brandon Stanley
Two-and-a-half out of five stars
Bangladesh tour of Pakistan
January 24 – First T20, Lahore
January 25 – Second T20, Lahore
January 27 – Third T20, Lahore
February 7-11 – First Test, Rawalpindi
April 3 – One-off ODI, Karachi
April 5-9 – Second Test, Karachi
Israel Palestine on Swedish TV 1958-1989
Director: Goran Hugo Olsson
Rating: 5/5