Manish Raj Singhania, President of the Federation of Automotive Sellers Affiliation (FADA), the apex lobbying physique for retail homeowners, seems to be bullish on car gross sales in the course of the present festive season, predicting that they are going to improve by greater than 40 % because of the festive season in comparison with a low base in FY22, thereby breaching the pre-Covid19 ranges. He emphasised that, regardless of vital quantity will increase in nearly each car section led by SUVs, two-wheeler gross sales, significantly on the decrease finish of the section, stay a supply of concern.
Excerpts from the interview:
How has the festive season impacted numerous segments of the trade?
The general festive season delivered far more sturdy development than our expectations on a Yr-on-Yr (YoY) foundation as in comparison with the same interval final yr.
Navratri gross sales have been good. Although we had a gradual begin with two wheeler gross sales in Onam, however in the course of the Navratri interval two-wheelers gross sales too picked up together with the passenger automotive gross sales. Whereas it was a on condition that the SUVs will carry out exceedingly effectively, all segments together with three-wheelers and tractors have additionally proven robust development. In a nutshell, we are able to say the trade has grown in robust double digits, with automotive market is anticipated to develop by 40 % in the course of the pageant interval which is a 32-day interval from the onset of Navratri to Dhanteras.
In our estimates, the expansion of two-wheelers is prone to be within the 4 or 5 % vary and most unlikely to breach the pre-Covid mark. What’s your evaluation?
You’re proper in your evaluation there was a turnaround within the two-wheeler gross sales, however gross sales are nonetheless far decrease than pre-Covid ranges and restoration on a YoY foundation for a similar festive interval might be very a lot inside single digits.
That is regardless of the wholesome degree of discounting between 10 to 12 % provided by a slew of OEMs. It’s nonetheless a tricky sport for the producers as the agricultural Bharat market remains to be not responding effectively. The 2019 base of 20 lakh might be robust to breach for the two-wheeler makers.
That’s not all, Dhanteras fell on a Saturday, banks have been closed, and this proved detrimental to the auto trade, particularly for two-wheeler gross sales. On the premium finish of the two-wheeler market, OEMs and luxurious automotive makers are crusing in the identical boat, going through comparable problems with chip limitations decreasing their manufacturing capabilities.
So, with the much-in-demand car briefly provide dealerships are saddled with the inventory of fashions apart from the favored ones as OEMs are nonetheless grappling with provide chain points for procurement of semiconductors for high-end bikes, the same situation as confronted by passenger automotive makers.
The EVs, particularly the two-wheelers, have had stellar development. Did you see the EV gross sales gaining the same momentum this festive season?
EVs have seen sturdy development. Whereas the marketplace for EVs is pegged at round 5 % of the whole two-wheeler market, it’s nonetheless dominated by newer manufacturers which can be but to win the client’s belief and confidence because of the EV fireplace situation. There was an enormous enchancment within the quick transition to EVs. The entry of legacy gamers like Hero Moto Corp, Bajaj and TVS with new entries will assist consolidate their choices in EVs will deliver footfalls again to the dealerships and enhance buyer belief and confidence for them to make the shift to EVs.
There’s a very robust demand for high-end luxurious automobiles, however availability is turning into a sore level for development on this class. Your feedback?
Availability is an enormous situation in luxurious automobiles, and we see this case not altering a lot.
What’s your view on passenger automotive gross sales past Diwali?
In passenger automobiles, the get together is prone to proceed from Diwali until the top of the yr and I do not see any demand stagnation going down. Maruti had quoted 3.6 lakh pending bookings, Mahindra’s tally was at 2.5 lakh. This festive season would have seen the unloading of those bookings, however you can not low cost the brand new bookings that the much-in-demand fashions refilling the order books.
A few of the OEMs and merchandise that may proceed to maintain customers fancy are fashions Mahindra’s XUV 700 and Scorpio N, Maruti Suzuki Grand Vitara and Brezza for its robust hybrid USP, and KIA for its up-middle market resonance that has created a powerful pull for the purchasers. The provision within the festive season will additional assist clients perceive the product higher, in flip producing new referral bookings which is nice information for the passenger car enterprise.
The monsoon has performed truant in lots of North Indian states. Nonetheless, some states have seen respectable monsoon. So how do you see the unfold by way of demand enjoying out?
So, as a rustic we’re largely depending on the monsoon, particularly the agricultural sector, and that is a really essential sector. The northern states have been vastly affected because the monsoon was not up to speed and wherever it got here, it got here very late.
That was an enormous deterrent for the agricultural sector. We’ve states like Jharkhand, Uttar Pradesh, Uttarakhand and different comparable North Indian states not giving correct numbers. They have been de-growing even throughout Navratri. In reality, a novel factor that we noticed throughout Navratri was Southern States have been prospering and kicking numbers. Predominantly, Navratri retails occur in Northern India, however Southern States have been actually giving numbers at the moment.
So, wherever there’s a scarcity or the place the monsoon has not been good, the gross sales of two-wheeler and entry degree automobiles will get affected. About 70 % of two-wheelers come from the agricultural market. So, not having a very good monsoon will additional have an effect on the already pressured numbers of two-wheelers and entry degree automobiles.