Auto Drive: White goods sales surge in October
THE consumer durables industry has managed to sell more than it expected in October. Significantly, the surge in demand has come at a time when the durable makers, in a departure from the past, stopped all substantial price discounts. This is in contrast to the automobile industry which has so far failed to generate a substantial spike in sales. More importantly, the period during which sales volumes spike is yet to come. The maximum chunk of Diwali sales, particularly in north India, takes place in the last week running into Diwali, which has just started. Market leader LG has already revised its sales target for the October-November period. “We have achieved the highest ever monthly sales of Rs 1,100 crore in October which was above our estimates. For the two key months of this season we have raised our growth targets by 7-8%, and we are looking to clock about Rs 1,900 crore in sales in these two months combined,” said LG Electronics India Director Sales & Marketing, V Ramachandran. Other companies have also witnessed a spike in sales during the last month despite the fact that Diwali was in October last year and year on year sales growth during the month was expected to be muted. Samsung for instance has clocked 25% sales growth during October. Given that the market is now headed into the peak sales period, it is confident of achieving the high 40% growth target with revenues of Rs 1,200 crore during the October-November period. “There was a lot of latent demand which was expected to generate sales this festival season as we didn’t have great sales during the cricket world cup early this year. In addition, since the high value premium products are growing faster it also pushes up the overall revenue growth figures,” said Mirc Electronics’ VP(Marketing, Sales & Service) Vivek Sharma. Mirc Electronics, which operates under the Onida and Igo brands, is expecting 25-35% sales growth during the festival period this year. Appliances major Whirlpool is sticking to its 25% growth target for the two months combined. Says Whirlpool India, VP(Marketing) Shantanu Das Gupta, ”This one week is going to be very critical in overall sales but given the footfalls and consumer interest we are certain that we will meet our growth target.” Among the product categories appliance sales have been particularly noteworthy this year. While, Diwali sales is primarily driven by consumer electronics, this year appliances have been generating good business. Dealers are reporting high demand for products such as washing machines and microwave ovens.