Passenger vehicle makers cheer as sales jump in month-long festival season

The month-long festival season that ended on Wednesday brought cheer to passenger vehicle makers as sales rose, buoyed by strong demand.

Consumers usually make big-ticket purchases during the season, which begins with Onam and peaks with Navratri and Diwali, and it is critical for automotive companies as it accounts for as much as a fourth of annual sales.

The top four carmakers, which have an 80 per cent share in the market, saw retail sales or deliveries to customers grow in high double digits compared with last year, officials at these firms said. If not for the still low supply of semiconductors, it would have been a record-breaking season, the firms said.

Unlike last year, when sales were hit because of an acute shortage of chips, improved availability helped firms ramp up production and meet the strong demand.

Deliveries of market leader Maruti Suzuki India rose to 190,000 units compared to 130,000 units last year. This, however, was still lower than the 205,000 units sold in pre-Covid 2019, said Shashank Srivastava, executive director at the firm.

Hyundai Motor India reported a 21 per cent year-on-year (YoY) increase in deliveries at 65,000 units, said Tarun Garg, director of sales and marketing.

Shailesh Chandra, managing director of Tata Motors Passenger Vehicle and Tata Passenger Electric Mobility, said the company was “delighted with the growth this festive season”.

Though it did not provide numbers on units sold, the firm said deliveries more than doubled during Dhanteras. ‘“For the festive period so far, our retail growth has been 43 per cent in FY23, compared to last year. Demand has been well supported this year with a significant ramp up in supply,” said Chandra.

The relatively higher supply of chips also aided Mahindra and Mahindra. “This year, overall festive numbers are about 2.5 times [higher than] last year’s. This is largely on account of both stronger demand and our ability this year to manage the supply chain challenges,” said Veejay Nakra, president of the automotive division at the firm.

The industry is expected to report the highest sales volumes this year at 3.85 million units, said Srivastava. “The pace of new bookings for us remains stable and reasonably robust,” he said. Maruti’s backlog of bookings stands at 440,000 units. For the industry, it’s around 825,000 units.

Srivastava cautioned though that bookings may not provide a complete picture and the trend will become clearer once production normalises. High inflation, lower-than-expected gross domestic product (GDP) forecast, and an impending hike in borrowing rates could weigh on demand, he added.