Rs3400 crore spent on advertising by car manufacturers

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Due to a significant drop in vehicle sales as a result of the Covid-19-induced lockdown, which impacted consumer demand, India’s leading carmakers drastically reduced their ad spending in the financial year 2020-21.

The total cumulative advertising spends of 11 car manufacturers fell by 26.38 percent to Rs 3415 crore in FY21 from Rs 4639 crore in FY20, according to data compiled on the basis of annual company filings of 11 car manufacturers.

Due to a significant drop in vehicle sales as a result of the Covid-19-induced lockdown, which impacted consumer demand, India’s top automakers drastically cut their ad spending in the fiscal year 2020-21.

According to annual company filings of 11 car manufacturers, total cumulative advertising spends of 11 car manufacturers fell by 26.38 percent to Rs 3415 crore in FY21 from Rs 4639 crore in FY20.

Mahindra and Tata Motors followed suit. While Tata Motors’ ad budget dropped from Rs 761 crore to Rs 439 crore (a 43 percent drop), Mahindra’s dropped from Rs 624 crore to Rs 259 crore (-59 percent).

During the pandemic, Daimler India Commercial Vehicles, which produces Mercedes-Benz India, and koda Auto Volkswagen India defied the trend and increased their ad spending. Daimler has increased its advertising budget from Rs 28 crore to Rs 94 crore, while koda Auto Volkswagen India has increased its budget from Rs 445 crore to Rs 665 crore in FY21.

Kia India’s advertisement expense decreased by 36%, from Rs 430 crore to Rs 317 crore, while Renault India’s advertisement expense decreased by 31.25 percent, from Rs 384 crore to Rs 264 crore.

In FY21, BMW India spent Rs 139 crore, down from Rs 171 crore the previous fiscal year. Honda Cars India’s ad spend for FY21 was Rs 132 crore, down from Rs 149 crore the previous year. The advertising budgets for Ford India and Mercedes-Benz India in FY21 dropped to Rs 111 crore and Rs 64 crore, respectively. Both companies spent over Rs 167 crore and Rs 101 crore in FY21, respectively.

According to industry observers, the Indian automobile industry has been experiencing a slowdown since 2019. The impending switch to BS6 emission standards was the first, followed by the COVID-19 outbreak in 2020. Passenger vehicle sales fell by over 28% in March 2021 compared to March 2020, according to the Federation of Automobile Dealers Associations (FADA).

And just as things were beginning to look up, the second wave of COVID-19 arrived, putting a damper on sales. However, despite the fact that the number of COVID-19 cases in India has remained low in recent months, vehicle sales have yet to pick up.

In November 2021, passenger vehicle sales fell by about 20% compared to November the previous year.

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