BackEncouraging post Diwali sales bring cheer to auto industry
At Maruti Suzuki India Ltd, the country's largest vehicle maker, customer bookings for its cars increased by 17%-18% during the fourteen-day period after Diwali compared to the same period last year
PremiumAutomakers are continuing to witness encouraging sales numbers post Diwali, signalling a sustained demand post festive season. While vehicle makers have witnessed a slight contraction in bookings and retail sales after the Navratri and Diwali, the numbers are still better than expected as many anticipated a double-digit decline, senior auto sector executives said.
Maruti Suzuki India Ltd reported 17%-18% jump in bookings during the fourteen-day period after Diwali as compared to the same period last year. Sequentially, bookings at the country's largest car maker dropped by just a single digit in the second half of November.
According to Shashank Srivastava, executive director, sales and marketing, Maruti Suzuki, the industry was expecting a larger drop in bookings and sales after the festive season since last year there was a massive 30% contraction in retails after Bhai Duj festival.
“In the last two months urban demand has recovered well but overall rural market has performed better than urban. Bookings are a good indicator or demand post festival and now we have to see how much of this (post-festive momentum) is because of the pent-up demand and how long this is going to continue. Though, I think we need to watch this trend till the middle of December before making any predictions for the future," added Srivastava.
Tata Motors, country’s third largest passenger vehicle manufacturer, also witnessed a similar trend and sales have fared way better than expected after the festive season. The Mumbai based car maker has been witnessing a surge in demand for its products like Tiago (a hatchback), Nexon (a compact SUV) and Altroz (a premium hatchback) after the resumption of operations post lockdown.
According to Shailesh Chandra, president, passenger vehicles business, Tata Motors, in the earlier years, demand after the festive season used to drop to the extent of 35-40%. However, this year the booking rates have held better and have seen a moderate drop of around 10% as a result owing to shift to personal mobility in the times of pandemic and also due to ongoing marriage season.
“Tata Motors has been witnessing significantly higher growth as compared to the industry in FY21 with rising popularity of its ‘New Forever’ range. In the last 15 days of November’2020, our bookings and retail sales have grown by more than 150% and about 125% respectively, as compared to fifteen days post Diwali, last year," added Chandra.
Though retails sales have continued to stay strong, vehicle makers across the board reduced wholesale dispatches in Nov to keep inventory level at dealerships in check. Most of the leading vehicle manufacturers like Maruti Suzuki, Hyundai, Hero MotoCorp, Honda Motorcycle and Scooter India have reduced wholesale sequentially expecting a dip in demand after the festival season.
While demand for passenger vehicles may have sustained the momentum set by the festive season, retails of two-wheelers continues to remain subdued as demand in rural markets seems to have peaked in rural markets in August – September.
According to a two and four-wheeler dealer in the National Capital Region, passenger vehicles are witnessing good pick up after the festive season and some of the manufacturers are not able to provide certain variants of the popular products to customers due to lack of inventory.
“We expect good retails in December for passenger vehicles but in two-wheelers especially motorcycles demand has not picked up as expected. The ongoing marriage season is also a factor behind good bookings and retail numbers of PVs," the dealer added.
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