Terror-breaker for cars

Auto Cos And Real Estate Firms Are Hoping For Lower Interest Rates But Mumbai Attack Means More Trouble For Them

New Delhi: As Mumbai is the second-biggest car market in India after Delhi, the terror attacks have dampened the hope of any revival of car sales, which have been witnessing a slowdown. “There will certainly be a drop in sale in Mumbai as people will not venture out for buying cars,” Pawan Goenka, president of automotive sector at Mahindra & Mahindra, told TOI. He said companies who were relying on the Mumbai market for boosting sales in the normally-sluggish year-end period would see a significant negative impact. 
    “It will be certainly slower than what it is in November. And going forward, December is never a big month for auto sales,” he said. 
    P Balendran, V-P for General Motors, also said that sales would be impacted in Mumbai. “The sentiment was already down for car sales. Now whatever little was to happen would also be hit,” Balendran said. 
    With Diwali and other festivals falling in October, November was in any case expected to be a weak month. December is always slow for auto sales as people prefer to buy new vehicles in the new year as it slightly increases the re-sale value. 
    A senior official with Honda said the company’s sales in Mumbai would be definitely impacted. “Mumbai is a very important city for us and the sentiment has certainly run low after the terror attacks. Thus sales would be affected,” the official said. 
    For Honda, attacks mean a blow to business as company has just started deliveries of its new City model. Shekar Viswanathan, wholetime director at Toyota Kirloskar, also said that the business confidence would remain low for some time. “The sentiment has nosedived following these attacks and sale prospects remain low for the next three months, particularly in Maharashtra and Gujarat,” Viswanathan said. Low sentiment would even offset any gains that would have come when the interest rates on car financing came down, he added.

Source: The Times of India dated 28th November 2008