As car sales fail to show any fast pick-up, companies are banking on discounts and other freebies to attract customers, who are shying away from new purchases, scared by an uncertain economy and fat EMIs. The situation remains same for two-wheeler makers too as Hero MotoCorp, Bajaj Auto and TVS post negative numbers.
While on paper car sales managed a modest 7% growth in July, the reality is different. The growth comes on a weak base — car sales had fallen by 16% in July last year and it was first sales drop in nearly three years, partly due to lower production at Maruti Suzuki, which was battling a labour unrest at Manesar.
The situation is no different now, and companies say it can go even worse with the monsoon remaining weak. Maruti witnessed a violent labour unrest on July 18, which led to a lockout at Manesar. The production loss at the biggest carmaker is set to puncture any chances of an early revival in the car industry, at least not before the festive season.
