New Delhi: After the conclusion of the first leg of the festive period, which ended with Vijayadashami on Wednesday, Indian automakers have reasons to cheer. Passenger vehicles (PVs) and two-wheeler demand during the nine-day Navratri festival saw a sharp year-on-year (YoY) double-digit increase for most automobile companies, albeit inflationary pressures, said executives at OEMs and dealerships.
The buoyant start to festive sales – which is expected to continue till Diwali – comes after two years of mixed to subdued auto sales. Mostly boosted by easing chip shortages, a slew of new launches and a resultant drop in waiting periods, festive auto retails in the last 10 days saw massive surge despite limited discounts and offers, that too majorly for entry-level segments.
According to the apex industry body of auto retailers Federation of Automobile Dealers Associations (FADA) the industry has witnessed a jump of 35-40% YoY in the PV retail and 15-20% growth YoY in two-wheelers during Navratri period.
Pent-up demand is strong but the challenge is producing vehicles as per this demand patterns of the models.Shashank Srivastava, Maruti Suzuki India, Senior Executive Director (Marketing & Sales)
However, a senior executive of a leading car company suggests that deliveries of pending bookings in the PV segment throughout this auspicious period has already surpassed the 2019 levels by 8%.
“Things have picked up really well this year. We have seen significant revival in two-wheeler sales during this period whose sales were falling for the last few months, signalling revival of sentiments across consumer segments. Improving chip supplies coupled with pent-up demand aided the PV segment a lot. We are already seeing a booking lineup of 8-9 lakhs cars for a 42-day long festive period. However, demand still continues to be skewed towards new launches in electric and SUVs such as Scorpio, Brezza and Hyryder,” Manish Raj Singhania, President of FADA told ETAuto.
Echoing similar sentiments, PV market leader Maruti Suzuki’s Executive Director Shashank Srivastava highlighted that cumulative retail sales of cars during Durga Puja stood at a record level of 175,000 units out of which 81,000 units were sold by Maruti Suzuki.
“Pent-up demand is strong but the challenge is producing vehicles as per this demand pattern.We are able to produce more 1l-engine vehicles like Spresso, Alto Wagon R, Celerio whereas the pending demand seems to be more in Brezza, Vitara, XL6, Ertiga, Dzire, Swift. So there is a mismatch between production and pending order bookings which we are trying to overcome,” Srivastava added.
Booking inflow during this period too continued to be strong thereby adding to the already existing healthy pending booking pipeline.Tarun Garg, Director – Sales, Service & Marketing, Hyundai Motor India
He also informed that so far the industry is holding close to 800,000 units of pent-up demand for cars out of which around 425,000 is for Maruti Suzuki. Notably, Maruti targets to produce 160,000-180,ooo vehicles this month and has well informed its component suppliers, as per channel partners.
During this period the country’s second largest carmaker Hyundai Motor India (HMI) has delivered more than 30,000 units across the country. “There is an extremely positive retail sales momentum for us during the festive period as customers continue with their preference towards personal mobility,” Tarun Garg, Director – Sales, Service & Marketing, HMI said.
He further noted the booking inflow during this period too continued to be strong thereby adding to the already existing healthy pending booking pipeline. “Going forward, we expect the booking and retail momentum to continue until the most auspicious Dhanteras and Diwali period,” Garg added.
Even the luxury carmakers are also in for a highest ever festive sales. India’s largest luxury carmaker Mercedes Benz has delivered 600 cars during this Navratri and Dussehra which is its best ever performance. The company usually sees sales of 500-550 units last year.
“For the first time we are seeing that most of the deliveries that have happened are majorly for pre-booked cars as there’s no readymade stocks available. From the production point of view we are producing higher ever volumes because the demand is even more than that, Santosh Iyer, VP – marketing and sales, Mercedes Benz India, said.
Though demand scenarios remain encouraging due to higher enquiries, supply related issues will remain a major concern amidst the festive season. According to Srivastava the high pending orders in PVs will not get fulfilled in the upcoming peak festive period of Dhanteras-Diwali which is still over 15-days away.
“The monthly sales figure for the industry during festive time is 300,000-320,000 units. Even if there is a perfect match between pent-up demand and production we still need 2.5 to 3 months to overcome the whole backlog,” he pointed out.
Going forth, industry experts opine that high inflation and sluggishness in GDP may impact the consumer’s discretionary purchase of vehicles. They also noted that once the banks will start increasing lending rates in their respective retail loans in response to the monetary price hike by RBI, which is expected to happen in November, this might put a pause on the sales spree that the industry is witnessing now.
