The six week long festive season that kicks off in a few weeks will most likely witness sale of one million units of passenger vehicles making it the best-ever season for the automotive industry.
Car and SUV makers are running plants at near full capacity to stock up on inventory even as dealer orders remain high in anticipation of a robust festive demand.
Typically, the festival season contributes about a quarter of the full year’s domestic volumes, which this year is expected to close at 4.1 million units. If India’s car market achieves the one-million feat this festive season, it will be nearly as much as Australia’s total yearly and more than half of UK’s yearly sales.
Shashank Srivastava, senior executive officer, marketing and sales, Maruti Suzuki said, “The 2020-21 festive period was marred by Covid-19 and the result of the pent-up demand was volumes of 934,000. That became the best-ever festive season for the industry.” There was a net addition of 45,000 units to the inventory during August as wholesales (dispatches from manufacturers to dealers) were at around 360,000 units while retails (actual sales to consumers) were around 315,000.
Tarun Garg, chief operating officer, Hyundai Motor India said, “This festival (season) looks to be the best ever. As for Hyundai, most of our portfolio is fresh and new with strong demand coming for across product lines. We should achieve the outlook of single digit growth for the year.”
Last year, the industry struggled to deliver cars to customers within the usual timeframe of under a month and this got further worsened during the festive days. This was because of a general shortage in semiconductor availability.
Many in-demand models, mostly SUVs, carried a waiting period of more than six months. Car buyers who declined to wait for that long, cancelled their bookings.
This year, however, automakers are keen to not let go of this opportunity.
“Inventory has increased a lot and dealers are cautious but they are also very positive about the festive days ahead. Last year we had huge demand but the industry was short on vehicles. This year the orientation of the dealers must be towards accumulation of stocks,” said a senior executive from one of India’s top five carmakers.
Dealers say that demand from the rural side of India has not really picked pace since the last several months as entry level models continue to struggle. However, this segment of the buyers can jump the demand bandwagon closer to the festive period, say dealers.
Manish Raj Singhania, president, Federation of Automobile Dealers Association, said, “The predictions that car makers are giving out about one million sales is quite achievable. The only worry is the rural economy. Last year saw the rural and semi-urban market coming out and buying vehicles but will that happen again this year remains to be seen. If that happens then it will be a record festive season.”
