White goods, car cos feel heat as EMIs go up

NEW DELHI: The seasonal bustle is missing at Life Enterprises, a major consumer goods retailer in the Capital. Pankaj Marwah, manager at the multi-brand retailer of airconditioners and refrigerators, said footfalls have been unusually low and sales subdued. "Summer has not been scorching this year and moreover products have become dearer as companies increased prices early on," a dejected Marwah said.

Ripples of a slowdown are being felt on the ground as dealers of durables and cars, two crucial consumer segments, report fall in enquiries and sales with rising interest rates and other negatives retarding demand. A field analysis by TOI, across major dealerships, showed low consumer confidence and an air of concern among sellers.

The impact is even more visible at car dealerships. "There is a decline in footfalls as compared to last year. Rising interest rates and petrol prices have seen many customers either defer purchase or opt for diesel cars," said a sales manager at dealership Samara Hyundai.

With RBI announcing the tenth rate hike in 15 months, auto companies fear that sales growth would fall to "low single digits" against the swashbuckling 30% growth of last year. "Things are becoming very bad and I think we should only expect a low single-digit growth now," Maruti Suzuki's managing executive officer (sales & marketing) Mayank Pareek said.

Toyota also had a similar view. "The market sentiments are down and both enquiries and conversions are going down," said Sandeep Singh, deputy MD (sales & marketing) at Toyota Kirloskar Motors. Singh said RBI's latest move will further dampen the growth. "The market will certainly slow down, though Toyota is better placed due to new model launches."

Pareek said the growth momentum was already disrupted as banks upped financing rates, taking cue from RBI's policy directions. The sentiments are already down and volumes have been falling, if we look at the numbers sequentially," Pareek said. To avoid borrowing at high interest rates, people are trying to increase the down-payment. "Many of them are borrowing money from relatives or friends at work place. This way, they hope to reduce the burden from EMIs as much as possible," said a sales executive at Competent Motors, one of the largest Maruti Suzuki dealerships.
source-http://timesofindia.indiatimes.com/business/india-business/White-goods-car-cos-feel-heat-as-EMIs-go-up/articleshow/8882528.cms
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