Thursday, 28 Sep, 2023

Sum of all parts: Car sales may surge 25% in June

Sum of all parts: Car sales may surge 25% in June

Passenger vehicle makers in the local market are set to report one of their highest-ever monthly sales this June, with consumer demand staying strong amid an easing in parts shortage that disrupted output through the greater part of the past year.

Industry insiders expect as many as 321,000-325,000 passenger vehicles to be dispatched from factories to dealerships in June — an increase of about 25% when compared with 255,743 units sold in the same period last year.

Volumes would have been even higher, likely breaching earlier records, had market leader

not gone in for a week-long maintenance shutdown. Passenger cars, sedans and utility vehicles sales registered record volumes of 334,311 units in October 2020, and thereafter of 321,794 units in March 2022.

Automakers in India report wholesale dispatches from factories and not retail sales to customers. “Demand parameters as reflected in inquiries and bookings remain stable at a healthy level,” Shashank Srivastava, senior executive director (marketing and sales), Maruti Suzuki, told ET.

“Despite the fact that some OEMs including Maruti Suzuki have their annual maintenance shutdown, it is expected that overall industry PV numbers for June will be quite high.”

Maruti Suzuki has pending orders for around 315,000 units. Hardeep Singh Brar, vice-president and head (sales and marketing) at Kia India, informed that the Korean auto major expects to register its highestever monthly sales this June.

“Supply is better than before. China has now opened up. There are some headwinds (in the market) because of inflation, the war in Ukraine and the volatility in the stock markets. But the old pipeline is very strong. So we don’t see any issues in terms of wholesale or retail,” he said.

Kia India had previously clocked best-ever sales of 22,622 units in March 2022.

However, with inventory in the channel ranging at half of normal levels — 14-15 days — waiting periods on popular models could remain rather long. Ravi Bhatia, president at consultancy firm JATO Dynamics, confirmed there is a long wait time for best-sellers, especially SUVs.

While Hyundai Venue has a waiting of up to 16 weeks, Maruti Suzuki Ertiga has a waiting period of 34-36 weeks, Mahindra Thar 24-36 weeks, Hyundai Creta 28-34 weeks and Mahindra XUV700 18-24 months.

With the order backlog continuing to grow, Tarun Garg, director (marketing, sales and service) at Hyundai Motor India, is more “optimistic than cautious” of the growth momentum sustaining in the market in the coming months.

“We fully understand that there are geopolitical risks, fuel prices are high, interest rates have gone up by 90 basis points in the last one month. But what we have seen in the past, India has been more resilient than the rest of the world, because of strong domestic consumption. India has hedged against a total dependence on globalization, which in these times is coming to our rescue,” Garg said.

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