Car makers eye over 1 million units in sales this season, on adequate inventory and improved supplies.
12 Sep 2023 | 4691 Views | By Ketan Thakkar
95% of car retailers are confident of posting very healthy sales in the upcoming 33 days of peak festive period of Navaratri to Diwali, said Manish Raj Singhania, President of the Federation of Automotive Dealers Association.
He informed that this was the key finding from the Association's recent survey ...
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95% of car retailers are confident of posting very healthy sales in the upcoming 33 days of peak festive period of Navaratri to Diwali, said Manish Raj Singhania, President of the Federation of Automotive Dealers Association.
He informed that this was the key finding from the Association's recent survey that FADA completed in August.
"Dealers missed the bus last year, because the demand was huge and we did not have the vehicles to give to customers. Last year, the waiting periods we talked about were 1 – 2 years. This time, dealers are better prepared, especially in the PV segment," said Singhania.
Already the stock at dealerships is the highest seen in the last three to four years and that is completely in anticipation of good demand.
"You can see stocks reaching 60 days paid up, so that’s the level of anticipation of dealers this time. They don’t want to miss the bus this time. They want to cater to customer demand and requirements and they are building up stocks as they are anticipating good demand," he reiterated.
Over 1 million car sales likely this festive season
In what is expected to be a record year for the industry, a little over 1 million vehicles are likely to be retailed say automakers and despite the high base, the industry may touch double-digit growth.
In 2023, the festive season is likely to spread across four months and 81 days starting from Chingam in August to Bhai Dooj in November. In the last festive season, the industry had sold about 9.4 lakh vehicles.
Shashank Srivastava, Senior Executive Officer, Sales and Marketing at Maruti Suzuki says the season of Onam has started on a very good note and the demand momentum is sustaining and for the first-time industry may breach the one million units mark.
“The rural growth is still higher than urban areas, the rural markets have grown by 13% so far this year. The demand parameters are all intact, the supplies have resumed, hence you are witnessing a very healthy sales momentum. Again the September 2023 sales is expected around 3.61 lakh units, which is going to be the highest ever.”
He however raised red flags of 8% deficit rainfall and its resultant impact on the rural incomes and the challenges of high inflation and a potential fear of rise in interest rates, which could prove to be a tailwind for the industry.
To cater to the high demand, the vehicle makers like Hyundai Motor India and Mahindra & Mahindra are ramping up production capacity.
The South Korean car maker has added 50,000 units incremental capacity at its Sriperumbudur plant starting July and Mahindra & Mahindra is gearing up for a monthly production capacity of 49,000 units per month from the current 39,000 units.
Tarun Garg, COO at Hyundai Motor India said, “The demand is robust and the momentum of Onam should carry well into the peak festive season across the country. The early part of the festive season i.e. Onam has witnessed over 10% growth over last year and we expect that for the rest of the season too, the growth rate should be around 8-10% over the high base of last year.”
The growing demand for SUVs, continues to drive the momentum in the marketplace. The share of SUV in the overall market is inching towards 60% and it was around 58% so far this year.
The launch of Exter subcompact SUV propelled Hyundai Motor India’s SUV share to 64% of its total sales and for Mahindra & Mahindra the SUV specialist, the strong momentum continues with a pending booking of over 2.9 lakh vehicles, despite production ramp up and higher deliveries.