Going into festive season, passenger vehicles in top gear

Getting into the upcoming festive season, passenger vehicles (PV) are in top gear signalling a turnaround of fortunes for the auto industry.

According to industry estimates the PV industry sales is expected to be 2.8 -2.9 lakh units in September, a growth of around 25% over the corresponding month of FY20. This is due to higher capacity utilisation of auto majors over the last month.

The growth this time in wholesales is also due to the inventory build up, for the upcoming festive season. Sustained demand for personal mobility post Covid and a higher offtake from rural markets are also helping the automakers clock good wholesale numbers , say experts.

Leading the PV sales is the country’s largest car maker Maruti Suzuki on the back of improved sourcing supplies and an upbeat customer confidence. While Shashank Srivastava ,ED, Maruti Suzuki refused to comment on the PV volumes this month , he mentioned that wholesales is likely to exceed retails.

“The subdued retails may be attributed to the inauspicious period of Shradh month followed by the Adik Maas. And equally good wholesales would be a reflection of normalised production and that of dealers increasing stock levels in preparation for the upcoming festival period ,” Srivastava said.

New launches like the Sonet from Kia and Urban Cruiser from Toyota have evinced positive response from consumers. Mahindra’s Thar which is to be launched this week is also expected to rake in numbers for the UV major.

Naveen Soni,sr VP of Toyota Kirloskar, which recently launched the sub compact SUV Urban Cruiser too agrees that wholesales will be better this month as a build up to the festival season. “We are seeing 14-18 per cent higher orders from dealers this month. We now have two shifts, which is also catering to the growth.”

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Says Manohar Bhat, head ,marketing, Kia Motors, that new launches in the market are adding to the numbers and auto makers are going all out for the festive season.

From January to August 2020, if there was an overall decline of 39 per cent, clearly segments like the mid SUVs have shown growth, he says. And segments like compact SUVs have seen a lower de-growth.

Post the lockdown being lifted auto companies and ancilliary companies saw demand bounce back. This resulted in retail sales doing better in the subsequent months, thereby bringing down inventory positions at the dealerships.

Had it not been for supply chain challenges, the industry would have done at least 10-15% more sales, say industry experts.

Experts said retail numbers reflect the mood of the consumers while wholesale numbers amounts to companies maximising billing, building inventory and getting a better market share. Till recently, wholesale numbers matched retail sales or were higher to retail. However, with constraints in supplies and production schedules, auto companies have been despatching lesser number of vehicles to the dealerships.

Behind market leaders Maruti Suzuki and Hyundai Motors, Tata Motors will continue to retain its number 3 position in passenger vehicles this month. What is interesting is that Korean car maker, Kia Motors, which launched its first product Seltos last August, could continue challenging Mahindra over the next couple of months, for the 4th and 5 th position in the PV space, say experts.



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