Automakers expect better car sales in festival season

With the festival season setting in and semiconductor shortage improving, vehicle makers expect delivery of vehicles to be on time, so that customers can take the deliveries on ‘auspicious’ days.

According to original equipment manufacturers (OEMs or vehicle makers) and their dealers, the Ganesh Chaturthi this year did not give much numbers to them as expected, but they hope Navratras would be better in terms of sales.

“There are bookings and customers are coming during the ‘Shradh’ also, just to book their cars and take the delivery during the ‘Navratras’ or even later dates,” Tarun Garg, Director – Sales, Marketing and Service, Hyundai Motor India, said.

Pending backlog

Speaking on the sidelines of Federation of Automotive Dealers Association’s (FADA) 4th Auto Retail Conclave — ‘Success Through Synergy’, Garg said there were 3,300 units of bookings on Monday as compared to around 2,700 units on any given day, just to give a perspective.

According to Shashank Srivastava, Senior Executive Officer (Marketing and Sales), Maruti Suzuki India, demand is more in the market than the supply because of the semiconductor shortage issue.

“The pending bookings are not giving the exact picture of demand patterns because it is the supply issues, which has created this pending backlog. So, the real picture will be clear once we have enough production going on. In the festival season, if we have a production which matches with underline demand pattern, then we will have very good numbers,” he said.

He noted that because of the long pending bookings, Q4 of FY22 saw sales of 9.22 lakh units of passenger vehicles (PVs) and in the first quarter of this year was 9.10 lakh units – so this is the first time in the history that there were two quarters of 9-lakh plus units. And in the current quarter, it is expected to do more than 10 lakh units of PVs.

“Therefore, three consecutive quarters of sales of 9-lakh plus units is possible only because of increase in availability ... the demand in future would be only known once we clear the backlogs,” Srivastava added.

Ashish Harsharaj Kale, former President of FADA and a dealer of Nissan, Mahindra & Mahindra and BharatBenz, said the traction of sales has come down a bit over the last few days, but it was manageable. “But with the semiconductor situation improving, waiting period will also come down to less than two months in the coming days,” he said.

Two-wheeler segment

However, in the two-wheeler segment, the situation still looks tough for the dealers, as the rural demand has not picked up yet.

“Even in festivals, while the two-wheeler sales will go up as compared to last year (because of low base), but the growth that we normally see is not the growth that we will see in two-wheelers even during the festival season. I am asking OEMs please don’t give me supply ... that’s the kind of inventory I am holding. Festival demand does not happen oevrnight ... buying an automobile journey normally takes 60 days, so if the festival demand is coming in, we would have already seen,” Nikunj Sanghi at JS Fourwheel Motors, said.

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