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 last 4 to 5 months which helps in retail,” car dealership body chairman Vinkesh Gulati told PTI during an interaction.

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.

FADA represents more than 15,000 car dealerships 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.

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