The automobile industry is one of the largest brand categories in terms of ad spends. The festive season especially draws many auto manufacturers to increase their ad spends. The auto sector has been seeing some tough times in terms of sales and only in the recent few months there has been an uptick in the sales of few of the automobile companies. This was mainly driven by high sales of newly launched cars.
Sales of two wheelers and four wheelers
As per the latest data from the Society of Indian Automobile Manufacturers (SIAM), the month of August has seen a rise in automobile sales, especially in the four-wheeler segment. The SIAM data showed that four-wheelers sales had risen by 6.06% in the month of August, while two-wheeler sales in August had dropped down to 2.98%. The drop in two-wheeler sales was mainly due to a drop in sales of the motorcycles segment to 9.59% in August. One of the reasons for this was the sliding sales in the rural markets for two-wheelers. Motorcycle sales too dropped by 2% during the April-June period this year, on the other hand automobile sales during the month of July saw high growth as the top seven auto companies’ sales numbers saw a combined growth of 17.2%.
The slowdown in sales has pushed many automobile companies to launch new products. According to a media report, the slowdown in two-wheelers resulted in two-wheeler companies to push for the launch of more than 15 new products in the next six months. The launch period is also known as a time when automobile companies spend the most as they launch various marketing campaigns to promote sales.
While ad volumes of four-wheelers especially on TV were more, two-wheelers too have seen a large increase in ratings. According to a report by Strategy Group (S-Group), the Analytical Arm of TAM Media Research, two-wheelers had higher ad volumes on TV than four-wheelers in 2014 which was vice-versa in 2011. Two-wheeler players such as Hero MotoCorp, TVS Motors and Honda Motorcycles heavily started advertising especially on TV in order to expand their business.
Last year media planners had projected that in 2015 four-wheelers will contribute more to ad volumes than two-wheelers. “The number of brands of four-wheelers and the launches that these brands do is far more than the two-wheelers this year. This is the reason that ad volume and spends from four-wheelers is much more,” said a senior media planner.
Launches of four-wheelers and two-wheelers
There are many launches from two-wheeler companies expected in the next few months during the year. For instance, Honda Motorcycles and Scooter India is launching 9 new two-wheelers this year. This includes the launch of Honda CB300F, Honda CB500F, Honda CB 500X, Honda CBR 300R, Honda CBR500R, Honda CBR650F and two new scooters Honda Lead 125cc and Honda PCX 150. The introduction of these new models is due to the slowdown in their sales and is expected to boost the market and sales going forward. Bajaj Auto is expected to launch two new models during the year. Similarly, Hero MotoCorp is expected to launch two new scooters in the next few months. Many of these launches will be coinciding with the festive season as sales during this period see a large growth. TVS Motors is expected to launch the new Apache in September and the Victor will follow later. Yamaha plans to launch a new 150-cc and above motorcycle in the next few months.
There are several four-wheelers which are slated to be launched during this period. Maruti Suzuki YRA (Baleno) Premium Hatchback is expected to be launched by the end of 2015, Maruti Suzuki Alto 800 Diesel in December 2015 and the new Ertiga during the festive season. Renault Kwid will be launched in October/November 2015. Mahindra will launch two cars during the festive season, one is Mahindra S101 Mini SUV and Mahindra TUV300 sub-compact SUV in September. Tata Motors is expected to launch Tata Kite hatchback during the festive period and Kite sedan by the end of 2015. The Chevrolet Trailblazer will also be launched during the festive season. The Ford Endeavour will hit the roads by November 2015, while the new generation Ford Figo will be launched by September/October 2015.
Festive spends from four-wheelers expected to be more
Last year the festive ad spends from the automobile sector was pegged at around Rs.450-500 crore. This year too ad spends are expected to be much more with the number of launches in the automobile sector. According to Anand Chakravarthy, Managing Partner, Maxus, “I think for the auto segment the festive season is most critical because between Dussehra and Diwali about 60% of the sales happen. If you see today’s newspapers you can already see two-three cars advertising in impact positions. So clearly I think ad spends will grow as there are a number of cars being slated for launch this year and a lot of them will launch during this period of the year”. He further added in terms of ad volumes he senses that there will be more from four-wheelers. “It is just that if you look at the sheer number of four-wheeler brands who are out there today and the number of models they are launching, it will be likely that the share of worth will be a much higher amount,” he said.
Ganesh Baliga, CEO, Fifth Estate, a media planning agency said, “I see four-wheeler ad volumes growing more. Because if you see now, there are more four-wheeler launches than two-wheeler launches happening.” He further added that four-wheeler companies such as Maruti Suzuki, Mahindra, Hyundai, etc. are much larger and will end up spending much larger for marketing their products with a large ticket size in comparison to the two-wheeler companies. He also pointed out that even for print you will see a full page ad for a four-wheeler but rarely will see a full page ad for a two wheeler.
Atul Sharma, GM – Communications Planning Strategy, Lodestar Universal said that while he expects a growth in ad spends from the auto sector during this festive period it is not going to be significantly higher. “Sales in automobile manufacturers have not shown much improvement during the year. A lot of the launches are also slated during the end of the year,” he said. He also said that four-wheelers this year will contribute higher in comparison to two-wheelers in terms of ad volumes.
Another media planner said that while they expect ad spends of automobile companies to grow during the festive season on the back of new launches, a major portion of the contribution will come from four-wheelers than two-wheelers.
While in 2014 the ad volumes of two-wheelers were higher, four-wheelers seem to be back in the game this year with higher sales, more launches and more ad spends expected.