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7th Pay Commission Expected to Aid Car Sales in India

The government recently approved the 7th Pay Commission’s recommendations, which will benefit more than one crore government employees and pensioners. This, in turn, means good news for automakers in India – who believe it will aid car sales in the country. Carmakers such as Maruti Suzuki, Hyundai, and Honda are expecting a spike in sales following the implementation of the 7th Pay Commission’s recommendations.

India’s largest carmaker, Maruti Suzuki India (MSI), hopes to achieve over 25 per cent growth in sales. It says central and state government employees contribute nearly 17 per cent to its total sales volume. With a 23.5 per cent hike in the salaries of 50 lakh central government employees and 58 lakh pensioners, Maruti is expecting “an impetus to car sales in this segment”. A company spokeperson further added that with a sales network of over 1,900 touch points and a wide array of new models such as Ciaz and Ertiga SHVS variants, Baleno, and Vitara Brezza, the company is prepared to leverage this opportunity.

The company has sold a total of 15 lakh vehicles under the purview of ‘Wheels of India’ – MSI’s special programme for government employees. While it sold over 2 lakh vehicles to the central and state government employees last year, it expects that number to cross 2.5 lakh in 2016.

Honda also shares a similar sentiment. Jnaneswar Sen, Senior Vice-President (Marketing and Sales), Honda Cars India, told PTI, “It is positive for the auto industry. Arrears and increments will lead to more cash in hand for consumers which will lead to more discretionary spending. At least in the short-term we are looking to increase in sales of automobiles.”

Hyundai Motor India’s General Manager, Marketing, Puneet Anand believes the 7th Pay Commission will assist the aspiration’s of the employees and pensioners. He added, “Hyundai Motor India will further enhance the delight of these discerning customers through over Pride of India offer under which customers will get additional benefit up to 7,000 over and above the prevailing offers.”