Rise in down payment witnessed in car buying

Indian car experts suggest that as per current situation either consumers are postponing purchase of new cars or they are increasing down payment while buying cars in India. Adding to this, major car manufacturing companies are also keeping their sales target lower than expected.Senior Vice-president (sales and marketing), Hyundai Motors India Ltd, Arvind Saxena said that current interest rate is highest in last six-seven years. Further he added that in last two years car sales figures has grown considerably due to easy finance schemes and reasonable interest rates. But now consumers are drifting away from car showrooms. Adding to the dilemma, the finance part in sales has also shown a dip, people are avoiding loans.

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It is worth mentioning that Hyundai Motors India is India’s second-largest passenger car maker company and offers some of the best selling models including Hyundai Accent, Hyundai i10, Hyundai i20, Hyundai Santa Fe, Hyundai Santro Xing, Hyundai Sonata Transform, Hyundai Tucson, and the recently launched Hyundai Verna Fluidic.

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Arvind Saxena commented that in past five-six months, number of consumers buying cars in India with cash has been increased from 33 percent to around 40 percent. Plus, number of people entering dealer showroom is also decreasing to 8-10 percent with booking-to-retention ratio dipping down to 70 percent from 85-90 percent.

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If records are seen, currently the growth of car sale in India is lowest since June-2009, when the industry was going through recession period. Furthermore, in-house sales of major automobile players (12 out of 18 passenger carmakers) experienced an increment of just eight percent in May this year, in comparison with 14 percent growth rate in April.

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India’s largest car maker, Maruti India, earlier quoted a growth of four percent in its car sales last month. Chief General Manager (marketing) Shashank Srivastava said that company’s fiscal growth rate projections will be reasonable enough to achieve and will be according to the industry growth rate which is expected to stay around 12-15 percent this year.He further confirmed the reports of car financing cases going down in past few months. He said that owing to the higher interest rate, consumers are avoiding car loans. It is worth mentioning that due to sudden hike in petrol prices the car sales were hit badly and contributed towards slashing the sales of cars in India.

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