Hopes dampen for car sale revival
30 Nov 2008 10:31 AM  by Rameshwar in Indian Car Market ,

As Mumbai is the second-biggest car market in India after Delhi , the terror attacks have dampened the hope of any revival of car sales , which have been witnessing a slowdown. "There will certainly be a drop in sale in Mumbai as people will not Venture out for buying cars , " Pawan Goenka , president of automotive sector at Mahindra & Mahindra , told TOI. He said companies who were relying on the Mumbai market for boosting sales in the normally-sluggish year-end period would see a significant negative impact.

"It will be certainly slower than what it is in November. And going forward , December is never a big month for auto sales , " he said. P Balendran , V-P for General Motors , also said that sales would be impacted in Mumbai. "The sentiment was already down for car sales. Now whatever little was to happen would also be hit , " Balendran said.

With Diwali and other festivals falling in October , November was in any case expected to be a weak month. December is always slow for auto sales as people prefer to buy new vehicles in the new year as it slightly increases the re-sale value. A senior official with Honda said the company's sales in Mumbai would be definitely impacted. "Mumbai is a very important city for us and the sentiment has certainly run low after the terror attacks. Thus sales would be affected , " the official said. For Honda , the attacks mean a big blow to business as the company has just started deliveries of its New City model.

Shekar Viswanathan , whole-time director at Toyota Kirloskar , also said that the business confidence would remain low for some time. "The sentiment has nosedived following these attacks and sale prospects remain low for the next three months , particularly in Maharashtra and Gujarat , " Viswanathan said. "A more disturbing issue could be that the low sentiment would even offset any gains that would have come when the interest rates on car financing came down , " he added. Car sales have been reeling under record-high interest rates and poor retail financing this fiscal. The stock market crash has made matters worse , dissuading people from making new purchases.

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