Auto industry expects car sales in fast lane during holiday season



The auto industry expects car sales to be on the fast track this festive season thanks to new launches and improved production, but is cautiously optimistic about the road ahead once the festivities are over.

The festive season, which usually sees a surge in auto sales, begins this year on August 11 with Rakshabandhan extending until Diwali on October 25.

“We expect this year’s festive season to be the best in terms of passenger vehicle sales thanks to new launches and improved production activity. The industry rolled out more than 3 lakh units on average over the past 4-5 months which helps in retail,” FADA chairman Vinkesh Gulati of the car dealership body told PTI.

He cited the erratic monsoon in parts of the country, inflationary pressures and the looming threat of a China-Taiwan war as some of the challenges to watch in the days ahead.

The Federation of Automobile Dealers Associations (FADA) represents more than 15,000 auto dealers across the country. Hardeep Singh Brar, Kia India’s vice president and head of sales and marketing, said supply chain issues now showed signs of easing and market sentiments remained optimistic.

“We are optimistic that a good holiday season awaits us in terms of sales,” he added.

Shailesh Chandra, president of passenger vehicles and electric vehicles at Tata Motors, said the company saw no concerns about customer demand before the end of the festive season.

On a call with analysts, he said the automaker expects vehicle supply to improve with better semiconductor availability in the second quarter. “Going forward, the challenges we see are that inflation and high interest rates may start to impact automotive demand while there is no stress with regards to the second quarter,” he said.

As for Tata Motors, the company remains focused on demand generation business, Chandra noted. Maruti Suzuki India, Senior Executive Director (Marketing and Sales), Shashank Srivastava, said demand appears to be stable at the moment.

“We have to be careful with retail sales, currently we are digging conclusions based on wholesale sales and pending bookings…retail sales have been lower than wholesale sales for the past few months…we we also need to see how the economy performs overall and how inflation and interest rates develop,” he noted.

Customer sentiment may witness changes due to these factors, he said.

Elaborating on the overall performance of the industry, he said that during the April-July period of this fiscal year, the passenger vehicle industry grew by 33% compared to the same period of the Previous exercice.

The PV sector sold 12.53 lakh units this year compared to 9.41 lakh units last year, Srivastava said. He noted that at the beginning of April, the industry’s stock was estimated at around 1.20 lakh units, which has now risen to around 2.12 lakh units, as the wholesale trade has exceeded the trade of detail.

“Therefore, we have to be careful in the future as to how this is reflected in the future market scenario. At the moment, due to the high number of pending payments, everything produced is pushed on the market,” he said.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor