Automobile Desk: As the festive season begins across the country, the excitement is back in the car market. Vehicle manufacturing companies are very excited by the heavy footfall of customers at showrooms and strong bookings for new vehicles. However, this time the real challenge of the market is not the demand, but the availability of vehicles and maintaining the supply chain. Mobilizing stock as per the demand has become a big puzzle for the top five automobile companies, which hold more than 85 percent of India's car market.
The months of October and November are considered to be the most important time of the year for the auto industry, because about one-third of the total car sales of the year occur in this festive season. This time, during the main festive phase from Navratri to Diwali, the entire responsibility of vehicle sales will depend on how quickly the companies are able to deliver the vehicles to their showrooms.
The country's largest car manufacturer Maruti Suzuki is currently facing a severe shortage of vehicles. The company currently has pending bookings of over 2 lakh vehicles, while dealers have an average backup of only 16 days of sales. On normal days, Maruti dealers carry at least one month's inventory stock during the festive season. Work is underway on a new automated manufacturing line to increase production, but it may take until December for it to be completely stable. Apart from this, reduced working days in plants due to festival holidays is also slowing down the production pace.
This supply shortage is not limited to petrol-diesel vehicles only, but the situation is even more serious in the electric vehicle (EV) segment. Due to the ongoing geopolitical tension at the international level and changing prices of crude oil, there has been a sudden increase in the demand for EV cars. To meet this sudden increase in demand, companies are not able to repair their battery and parts supply chain in time, due to which EV buyers have to face long waiting periods.
Talking about Hyundai Motor India, the company has prepared about 4 to 5 weeks of inventory for the main phase of the festive season. To further strengthen its supplies, Hyundai is fast-tracking the introduction of a third shift at its Talegaon plant so that deliveries of its upcoming mid-size SUV and other models are not disrupted. Nevertheless, industry experts believe that considering last year's high sales level (high base), the overall industry growth in the second half of this year may be limited to only around 5 to 6 percent.
Similarly, Tata Motors also has full expectations of growth in its retail sales during this period, even if the growth figure in percentage terms appears to be slightly less than last year. According to the Federation of Automobile Dealers Associations (FADA), the festival calendar this year is quite scattered—with Onam, Ganesh Chaturthi, Navratri and Diwali falling in different months, it is difficult to directly assess sales figures. Despite this, if companies increase their supplies in time, this festive season can set a new record for the car market.
