Carmakers see bumper sales this festive season

It is expected to be a smashing festive season for the Indian passenger car market. About 1.3 million people are likely to drive their dream car home during the August-November period – which accounts for the main festivities – generating sales of more than ₹1 lakh crore for the industry, according to industry estimates.

That is 20% higher than a year earlier and about 13% more than the previous party peak, recorded in 2017.

Over the past 10 years, automakers in India have shipped an average of about one million cars and SUVs in the period from August to November, accounting for about 35% of annual sales. In 2017, they shipped around 1.15 million vehicles to their dealers.

In the past ten years, festival shipping volumes exceeded one million units in four years. Most automakers in India only report wholesale numbers and not consumer deliveries, which can differ significantly from factory deliveries.


By July, an estimated 342,000 vehicles had left factory gates — the highest monthly shipments ever, including during what’s commonly considered a lean month — as the improved availability of semiconductors allowed automakers to ramp up production. While retail sales were much lower last month, many of these vehicles are likely to be delivered to customers this month. “With improved chip inventory and continued booking momentum, the upcoming holiday season looks set to be very healthy,” said Shashank Srivastava, executive director (sales and marketing) at market leader.

Despite the challenges of the global economic slowdown and inflation concerns, new bookings are still robust, pointing to the underlying strength of the Indian economy, Srivastava said. “Now that the economy is poised to grow at 7%, we expect the auto market to have a positive impact from this,” he added.

While deliveries have generally improved, a challenge for automakers will be to align their model production with the underlying demand pattern, Srivastava said. “This challenge will be more for OEMs (automotive manufacturers) with a wider range of models.”

This will undoubtedly be the first normal holiday season in three years, with the last two disrupted by Covid-19 and supply chain challenges.


executive, however, warned that higher purchase costs due to regulatory changes and higher interest rates could still impact growth momentum.

Nearly 700,000 customers are waiting to receive the vehicles they have booked. In the four months leading up to July, retail registrations were higher than shipped vehicles. Although there was a dip in July, both shipments and retail are likely to match over the holiday season, according to industry executives and experts.

Passenger Vehicles and Tata Passenger Electric Mobility director Shailesh Chandra said a strong fiscal first quarter had given the sector much-needed boost after two years of decline. He expects the sector to grow further in the second quarter on the back of a strong order pipeline, new launches, low channel inventory and festive demand.

“The industry appears to be well balanced to surpass the peak reached in FY19,” he said.

However, he said, “We will have to monitor the demand situation after the holiday season with caution as inventories were strong in the first half of CY2022. The (festive season) may ease pent-up demand and seasonality may begin to hit the industry. ”

A strong tailwind in order intake, driven by new models and inventory below historic levels, is expected to help automakers maintain current momentum. The inventory in the car market is about 220,000 units, which is good for 20 days of sales, compared to 30-35 days in the normalized environment. This ensures sufficient supplies during the Sradh period and higher supplies during the peak festivals of Navratri and Dussehra.

Vinkesh Gulati, president of the Federation of Automotive Dealers Association, said India is entering the holiday season from a positive to a neutral frame of mind. “The auto market has consistently exceeded 2019 numbers for the past 5-6 months. If automakers are able to deliver more and reduce wait times, breaking a barrier of 1.3 million this holiday season seems realistic. the best party season yet.”

However, he said that concerns about the two-wheeler market still persist.

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