Car Manufacturers Spent Over Rs 3400 Crore On Advertising In FY21; Less Than FY20

India’s driving car manufacturers sliced their advertisement spends definitely in the monetary year 2020-21 because of a huge drop in car sales directly following Covid-19 actuated lockdown which affected buyer interest.

As per information collected by the finance team dependent on the yearly company filings of 11 carmakers, the absolute combined publicizing spends by these organizations were somewhere near 26.38% to INR 3415 crore in FY21 from INR 4639 crore in FY20.

The advertisement spending numbers for Tata Motors, Maruti Suzuki, and Mahindra have been obtained from the FY21 yearly reports of these organizations. The advertisement spends information on Škoda Auto Volkswagen India, Hyundai Motors India, Kia India, Renault India, BMW India, Honda Cars, Ford India, Daimler India, and Mercedes-Benz India depend on the monetary data information of these organizations obtained by Tofler dependent on their yearly recording to the Ministry of Corporate Affairs (MCA).

India’s biggest car manufacturer Maruti Suzuki had chopped down its ad consumption by 16.5%, from about INR 670 crore in FY20 to INR 561 crore in FY2021. Hyundai Motors, which is the second-biggest automaker in India, sliced its advertisement spend by 37% in a similar period to INR 464 crore from INR 737 crore.

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Mahindra and Tata Motors stuck to this same pattern. While Tata Motors diminished its promotion spending plan from INR 761 crore to INR 440 crore (- 43%), Mahindra decreased it to INR 260 crore from INR 625 crore (- 59%).

Daimler India Commercial cars, which produces Mercedes-Benz India, and Škoda Auto Volkswagen India have avoided the pattern and have expanded their advertisement spending during the pandemic. Daimler has significantly increased its advertisement spend from INR 28 crore to INR 94 crore while Škoda Auto Volkswagen India expanded it from INR 445 crore in FY20 to INR 665 crore in FY21.

Kia India’s advertising spending contracted by 36% from INR 430 crore to INR 318 crore while Renault India cut down its advertisement spending by 31.25% to INR 265 crore from INR 385 crore. BMW India spent INR 140 crore in FY21 contrasted with INR 172 crore in the past monetary.

Moreover, Honda Cars India’s ad spend for FY21 remained at INR 132 crore as against INR 150 crore. Portage India and Mercedes-Benz India’s FY21 promoting spends dropped to INR 111 crore and INR 65 crore separately. In FY21, the two companies had spent Rs 167 crore and Rs 101 crore respectively.

Discussing the downfall in ad spending, Shashank Srivastava, Executive director, Marketing & Sales, Maruti Suzuki said, “The ad spends dropped in 2020-21 as there was no new product launch and sustenance campaigns were also at a low level due to weak demands in the pandemic. The Ad Ex has improved in the current fiscal (Apr to Dec 2021) though it is expected to be 4-5 % less compared to pre-pandemic levels.”

“Despite several challenges posed by the pandemic and the global semiconductor supply constraint, the Indian automotive industry has consistently contributed towards positive growth of the Indian economy. The Indian government is driving a variety of initiatives in parallel to boost the auto sector through product-linked, scrappage policy, etc. We are cautiously optimistic about these initiatives and hope it would bring investments and growth in the entire manufacturing value-chain in India,” a Hyundai Motor India spokesperson said.

Industry watchers say that the Indian automobile industry has been grappling with a slowdown since 2019.

First, it was the impending switch to BS6 emission norms followed by the COVID-19 outbreak in 2020. According to the Federation of Automobile Dealers Associations (FADA), passenger vehicle sales had dropped by over 28% in March 2021 compared to March 2020. And as things started showing signs of revival, the second wave of COVID-19 took a toll on the sales. But even as the number of COVID-19 cases in India has remained low over the last few months, the sales of vehicles are yet to pick up the pace. There was a decline in passenger vehicle sales by about 20 percent in November 2021 compared to last November.

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