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Carmakers See Enhanced Sales From Government Employees

Leading carmakers such as Maruti Suzuki, Hyundai, Toyota, Tata Motors, Honda, etc. are anticipating over 30% growth in sales to government employees and pensioners at 3.5 lakh units this year.

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The domestic passenger vehicle sales are expected to get a huge fillip following the implementation of the 7th Central Pay Commission (CPC) in July this year. Most of the leading carmakers such as Maruti Suzuki, Hyundai, Toyota, Tata Motors, Honda, etc. are anticipating over 30% growth in sales to government employees and pensioners at 3.5 lakh units this year. The pay panel had given an overall 23.55% increase in pay, allowances and pensions of 48 lakh (70% civilian and 30% defence) government employees, including a 16% salary hike, 63% surge in allowances, and 23.6% increase in pension. 

R.S Kalsi, Senior, Executive Director, Marketing & Sales, Maruti Suzuki, stated, “For the period Apr-July we have posted a growth of about 50% over the previous year with over 100,000 units in this segment. The robust growth is on account of several factors such as a wider product portfolio comprising models like Alto, Wagon R, Swift, Dzire, Ciaz, etc., which is available for every rank and position.  Furthermore, our wide sales and after-sales service network gives tremendous confidence and assurance to these customers who are often posted in remote locations and extreme conditions.”

Rakesh Srivastava, Senior Vice-president (Sales and Marketing) at Hyundai Motor India Limited, affirmed, “Implementation of the 7th pay commission will definitely boost our volumes in the hatchback and compact sedan segments. We have equipped all our dealerships with trained teams to serve the needs of these employees by offering multiple options and service packages. With the introduction of GST, the CSD prices will be same across 29 states in the country.  So government employees, including the ones from PSUs, are significant prospective customers for us across urban and rural India.  Our ‘Pride of India’ offer is customized for central government employees and constitutes 17% of our total volumes. With this initiative, Hyundai aspires to increase its engagement towards becoming the lifetime partners of Central Government Employees.”

“We see a great opportunity with the implementation of this year’s pay commission. Our offering – the “Drive the Nation” campaign, applicable on all the products under Etios series, is a tribute to government employees who tirelessly work to drive the nation’s growth. The last two phases of the campaign rolled out in September 2016 and January 2017 respectively witnessed overwhelming response from customers across the country. We expect to get a very good response to this campaign specifically meant for government employees. Our current share is < 5 % and we expect the demand to grow due to higher disposable income from government employees, noted N. Raja, Director & Senior Vice President, Sales & Marketing, Toyota Kirloskar Motor.

“We feel the entire advantage of the 7th pay commission is yet to be exploited. There has been some instability since November due to demonetization. However, now with things settling down, we feel customers who had postponed their buy may come back to the market. This will give a thrust to A&B segment sales (in PV segment). With around 25% central government employees and similar state government employees were expected to come into the fold as they will touch annual salaries of around Rs. 4-5 lakh which is the trigger point to buy a car. Around 3-3.5 lakhs sales were expected on account of 7th pay commission as per our calculation. Also with lesser loan rates this may further motivate the buyers to finally own a car,” Puneet Gupta, associate director at IHS Markit, a market research firm

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