Leading automakers Hyundai and Honda Cars expect demand for cars to remain strong in the festive season with improvement in the market situation following the easing of COVID-19 restrictions in the most of the states.
The automakers are also bullish on the sales prospects during the peak festive period with more and more people looking at personal mobility solutions amid the coronavirus pandemic.
The companies listed supply chain challenges, including the semiconductor shortage and possible COVID third wave, if at all it is there, as the biggest challenges that could have an adverse impact on the sector.
Demand pull seems to be very good and it is across the segments. Due to this shift happening towards personal mobility, we are seeing a good traction across the country and across product categories and the build up to the festival season also looks to be very good," Hyundai Motor India Director (Sales, Marketing and Service) Tarun Garg told PTI in an interaction.
Echoing the sentiment, Honda Cars India Senior Vice-President and Director (Marketing and Sales) Rajesh Goel said the market sentiment has improved since the easing of COVID-19 restrictions post the second wave of pandemic.
"The recovery of industry volumes has been faster than initial projections during the last few months, which is a good thing for a positive momentum to continue through the festive season. The celebratory fervour which began with Onam in Southern India will now extend to the rest of the markets as we move towards the peak of festivities," he added.
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There are several new model launches lined up from the industry players during this period which would help generate better sales, Goel noted.
The company's latest offering, the new version of compact sedan Amaze, has received an encouraging response across markets and the bookings are quite strong, he added.
On the chip shortage issue, Garg said that like everyone in the industry, Hyundai is also impacted and trying to manage its production in the best possible manner in the current circumstances.
"We are part of the global supply chain so we are also facing a similar challenge. But our response is a bit different from others. This chip shortage is not a new thing, it has now been there for the last one year. So we have been thinking about what measures could be taken. We are trying to be flexible in our production, he added.
Better procurement management, flexible production and support from the parent firm, Hyundai Motor Corporation, has helped the company manage the situation well so far, Garg said.
"We will keep up the efforts to reduce the gap between the demand and supply to the best extent possible. The problem is too acute and we just hope that we are able to communicate to the customers that this is a global issue. Hope the customers understand that they may have to wait a bit longer for the product due to production constraints amid supply issues," he stated.
Goel also acknowledged that the supply chain hurdle, including chip shortage, was a big challenge being faced by the industry to produce and supply cars in line with the strong demand.
"We are also impacted by this shortage and are making our best efforts to minimise it as much as possible. We are also constantly monitoring the market situation for any COVID-related interruptions in future," he added.
Semiconductors are silicon chips that cater to control and memory functions in products ranging from automobiles, computers and cell phones to various other electronic items.
The usage of semiconductors in the auto industry has gone up globally in recent times with new models coming with more and more electronic features such as Bluetooth connectivity and driver-assist, navigation and hybrid-electric systems.
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