Car makers zoom into festive mode, 10-15% more AdEx on cards in Q2

Following a few tumultuous years of lacklustre sales, leading car makers like Maruti Suzuki, Tata Motors and Toyota have witnessed a bumper sale over the last few months

by Kanchan Srivastava
Published - September 05, 2022
4 minutes To Read
Car makers zoom into festive mode, 10-15% more AdEx on cards in Q2

Riding on high demands and bumper sales over the last few months, Indian auto majors have planned to up their marketing and promotional activities to cash in on the festive mood of customers. 

Auto majors have planned to increase their advertising expenditure by 10-15% for the Q2 and even Q3, compared to the previous year, Shashank Srivastava, Executive Director (Marketing & Sales), Maruti Suzuki India told e4m. 

Says Virat Khullar, Group Head Marketing, Hyundai Motor India, “Our Onam ad in Malayalam language is already on air. As the season proceeds, we would adequately activate some other markets. The ads would be different for Ganesh Chaturthi, Navratri and so on. Launches would be hyper local digital with different creative and media approaches.”

Adds Tarun Garg, Director - Sales, Marketing & Service, Hyundai Motor India, "We are anticipating a further uptick in demand of our cars across segments during the festive season. We will continue to focus on matching supply with demand. With continuously improving semiconductor supply month after month, our production is now at optimum levels. As the demand is still exceeding supply, our priority during festive season will be to reduce waiting period and expedite delivery of cars to our valued customers. The approximate waiting period currently ranges from 3 to 4 months across models."

The festive season, which usually witnesses a spike in passenger cars, began on August 11 with Rakshabandhan followed by Janmashtami, Ganesh Chaturthi and Onam in different parts of India and will be stretching up to Diwali-Bhai Dooj on October 26. 

New Launches 

The AdEx in the auto sector is primarily divided around four activities- brand sustenance, new launches, tactical on-ground promotions and print media. Most new model launches are scheduled around the festive season only. 

Hyundai rolled out ‘Tucson’ in August and will launch -’Venue N Line’-on September 6 in metaverse. 

Maruti has come up with a new Alto model, Grand Vitara and S-Cross to cash in on the festive mood of customers. Mahindra and Mercedes Benz have their EV models coming up to capture the emerging electric vehicle segment. Toyota, Renault and Ferrari too are expected to roll out their new models in the next two months. 

The auto segment accounted for about Rs 4,000 crore of AdEx in 2021, out of overall Rs 46,500 crore expenditure on traditional media platforms, keeping digital aside, says Pitch Madison Annual Report 2022. 

More than half of it, that is Rs 2,500 crore, comes from carmakers only. Maruti alone spent nearly Rs 700 crores in media and marketing activities in 2021.

Spokespersons for other carmakers refused to comment on their AdEx, but company officials echoed the jubilant mood for the next two quarters that coincide with the festival season. 

Bumper sale ahead of festive season

Following a few tumultuous years of lacklustre sales, leading car makers like Maruti Suzuki, Tata Motors and Toyota, have witnessed a bumper sale over the last few months. 

Such is the demand that market leader Maruti Suzuki has booked 4,00,000 cars, an all-time record, even as the company has been running its manufacturing plant at Gurugram at 95% efficiency now, Srivastava pointed out. 

The combined sales at the top eight passenger vehicle makers rose year-on-year by 25 per cent to 2.92 lakh units from 2.34 lakh in the corresponding period last year, shows the June month’s sales data released by companies. 

This is significant considering the fact that the sale of passenger cars has decreased in the country, from 1.54 lakh to 1.46 lakh units, between 2021 and 2022 as per the statistics of SIAM, the apex national body of Indian Automobile Industry. 

Analysts expect car makers to continue a good run because they bring in new models for the festive season to make the most of the robust demand. 

CRISIL expects the domestic passenger vehicle market, by the end of the year, will touch 14-15 per cent growth compared to year 2021 and surpass the peak FY19 volumes.

Semiconductor shortage 

Although vehicle bookings have surged, the supply chain bottlenecks, particularly the semiconductor availability, have improved compared to previous years. A few car models still face shortage of chips though. 

“Semiconductor for some of the models continues to be an issue so we are not able to run the plant at 100 % efficiency. Hence, it will take some time to clear the pendency,” says Srivastava.