As automakers report strong numbers since July, the automobile industry expects the festive season to bring in some more cheer in terms of both sales and ad spends.
The auto sector has always been among the top five selling categories during the festive season, mainly due to the purchase pattern, market demand and lucrative offers.
Automakers, especially in the EV and two-wheeler segments, remain optimistic about demand in the coming months even though there is uncertainty over Covid-19 and a possible third wave.
The buying pattern is fluctuating this season and so Vijay Kaul, Deputy General Manager, Marketing Communication, Yamaha Motor India, said brands should have a dynamic approach and adapt quickly.
“The festive season is always the key volume-driver since many people wait for festival offers and auspicious days to buy vehicles. Now the sentiment looks positive, and people have started adapting to the new way of life. The two-wheeler category has become more of an essential and preferred mode of travel amid the anxiety to opt for public transport despite complete vaccination,” he added.
He expects the festive season to boost lost sales for the company, which has some products lined up for this season with exciting offers.
“I believe it will increase the overall numbers for the year, if not till pre-Covid numbers. This year’s July ad volume was higher than 2019’s July ad volume. That means everyone is gearing up for this festive season. Also, newer players have started advertising and hope to have better sales,” he added.
The EV sector stands to benefit from the festive season as the government has taken some right initiatives. Now that more and more people are becoming aware of EVs, it acts as an impetus to help the industry as a whole to flourish.
Jeetender Sharma, Founder and Managing Director, Okinawa Scooters, is optimistic about sales in the coming months. Many governmental initiatives such as Revised Fame II and multiple state subsidies are playing an essential role in EVs giving remarkable competition to regular ICE engines.
“We sold 30,000 units in fiscal 2021 and are confident of more than tripling sales to nearly 100,000 units this year. We witnessed a surge in sales on account of rising fuel prices as well as supportive policies of several state governments, inducing customers to opt for electric mobility. This season, we are expecting to sell 35-40k EVs and at this moment, our overall outlook for the mid to long term remains positive and we hope for an uptick in the market sentiment,” he said.
According to Sharma, humongous ads spends are expected from the EV sector from both four- and two-wheelers as they thrive to create extensive awareness, eliminate range anxiety issues and educate users on the benefits of electric vehicles.
“Companies like us are betting big time on advertising our products. We are confident of increasing sales more than three times,” he said.
Kavitha Ganesan, Head, Brand Marketing, TVS Srichakra, hopes this festive season will be good for both brands and trade.
“The two-wheeler tyre demand remains strong with substantial growth in tier two and three cities due to increasing preference for private mobility among customers,” she said.
The company is witnessing a bounce-back in sales and a balanced volume growth prior to the festive period. With improving consumer sentiments and resumption of IPL and the T20 World Cup, she expects an uptick in ad spends this year.
Traditional mediums remain strong for auto sector
Yamaha Motor has been active throughout the year on TV, print and digital and the results of the media campaigns have been as good as it was during pre-Covid. Kaul said the ad spends will be higher this year comparatively as most cities have lifted lockdowns, people are back to offices and positive sentiments are the core reason.
He said, “This festive season's big-impact sports properties such as IPL and T20 World Cup will surely lift the adex.”
The company has started re-exploring OOH and radio in the last two months (other than already using print, digital and TV). This festive season it will probably be more skewed towards print, TV and digital.
“The dependency on print and digital becomes imperative with tactical campaigns and offers. TV will still play a lead role in building brand imagery and communicating the core features. We are focusing more on enhancing the experience of a product for a customer and their convenience in making a seamless purchase journey,” he said.
Before Covid-19, there was a lack of awareness about EVs and there were a lot of misconceptions. But with the collective efforts of the government, OEMs and stakeholders in the last two years, awareness has been increased, issues addressed and sales has taken a boost.
Sharma said the EV industry has undergone a huge transformation.
“With players mushrooming in the sector, there is definitely a spike in adex as companies compete to capture a significant share in the market. It is expected to grow even further, as much as 200% over the previous year, as the race towards building brand recall and winning over the other accelerates. Companies are creating a buzz to educate people about EVs and as a result, we are seeing a change of perception, which is overwhelming and much needed. We have surpassed pre-Covid levels in terms of ad spends,” he added.
Digital will top the list for the company, followed by TV and then print. Its main marketing strategy will focus more on TV.
Ganesan expects the category to place more impetus on digital and possibly selective spends on print.