GST rate cuts were to offset a surge in festive sales for sectors like cars, bikes, electronics and more. While some sectors see the trickle-down of the impact, the two-wheeler segment is yet to see some action. Rakesh Sharma, Executive Director at Bajaj Auto, though, is not worried at all, as he believes that the GST rate cut will bring in festive sales that are better than the sales last year.
He expects the benefits to pull the industry out of the prolonged period of negative growth into positive territory. Further, he noted an upturn in customer enquiries and store visits in the past week, signalling a positive response from consumers ahead of the festive season.
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Bigger And Better Sales Than Last Year
Looking ahead, Sharma expects new demand during the festive season to be stronger than before.
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"The new demand which will come in the festive season should be better than what it was before," he said. He emphasised that the positive momentum is not just quantitative but also "qualitative", marking a significant turning point for the industry.
Sharma pointed out that the average income of a two-wheeler customer is around Rs 40,000 per month. He also added that the initial conversations with dealerships indicate a positive trajectory for sales.
Not Worried About Sales Downtick
Sharma addressed the recent 31% dip in two-wheeler sales volumes, as reported by Vahaan data, which has occurred as consumers pause their purchases to benefit from the impending GST rate cut.
He dismissed concerns about this short-term downtick, clarifying that it's "not comparable data" and that buyers are simply waiting for the tax reduction to be implemented.
"Everyone will wait for the GST rate cut to kick in; why would anyone buy before the cut?" he stated. The Bajaj Auto executive highlighted that the industry had been in a negative growth phase for a long period, from April to August, a period he considers "long enough".
He attributed this slowdown to high inflation, which reduced the disposable income of customers, and a corresponding restraint from retail finance companies. He is optimistic that the GST cut will largely mitigate these issues.
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