India, a beacon of hope in Consumer spending

Globally as consumer spending dips, India seems to power on. Take, passenger cars for example. Its been a bloodbath for Auto majors in the US. Ford Motor Co. says its U.S. sales plummeted 32 percent in December as buyers continued to steer clear of showrooms due to economic uncertainty. Toyota Motor reported Monday a 37 percent drop in US sales in December, which helped drag 2008 sales down 16 percent to 2.2 million vehicles. The Japanese automaker's Toyota division recorded a 15 percent drop in annual sales to 1.96 million vehicles as December sales fell 38 percent to 118,587 vehicles. Toyota's luxury Lexus brand posted a 32 percent drop in December sales to 23,362 vehicles and a 21 percent fall in 2008 sales to 260,087 vehicles. Chrysler says its December U.S. sales plunged 53 percent, blaming a tough economy with driving customers from showrooms. Chrysler sold a total of 89,813 vehicles compared with 191,423 in the same month last year. Despite the drop, the month's sales were up about 5 percent from November levels.

India too may not see encouraging sales in the Auto sector. But that I believe has more to do with the consumer holding back from making a purchase, hoping prices will slide further. The beacon of hope in India comes in the form of Consumer Durables. The consumer durable sector is showing signs of considerable resilience. The last quarter of 2008 experienced double digit growth. Spends on televisions and home appliances are expected to spill over into the new year. Auto majors too inspite of a bleak calendar year closing are revving up to introduce cheeky, new models in 2009.

Apart from the much-awaited Nano launch in 2009, there will be Splash from the Maruti Suzuki stable and the Jazz from Honda. Despite the troubles at home, GM has also lined up two new launches in the Cruze sedan and an all-new small car. Italian carmaker Fiat would be launching the Linea sedan and the Grande Punto, while Mahindra is to launch the Xylo. All new models at new prices. Here too, bargains and the discounts are likely to continue for the major part of the new year, as companies would be forced to offer lucrative deals to pull in customers.


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