September 25, 2020

Automakers kick off festive season on a wholesome word, delivers 15-20% progress in Onam and Ganesh Chathurti for the primary time in 4 years



The festive season of FY-21 has bought off to a very good begin with the 15 days of Ganesh Chathurti and Onam recording sturdy double digit progress of 15-20% over earlier season.

Automobile makers have offered near 50000 models within the states of Maharashtra and Kerala throughout the important thing festivities in August, which normally attracts larger numbers of bookings and deliveries. That is for the primary time in three years that automotive makers have notched double digit progress in gross sales throughout the important thing festive season.

Maharashtra and Kerala normally account for about 17% of the entire gross sales for automotive makers, nevertheless within the month of August, the share of each the states elevated to 22% of complete retail gross sales of about 232000. Normally a very good begin of Ganesh Chaturthi and Onam paves approach for a wholesome festive season for the remainder of the nation.

Shashank Srivastava, ED, gross sales and advertising at Maruti Suzuki says an easy comparability of retail gross sales knowledge over final yr is not going to be truthful due to floods in Kerala final yr and different financial components had impacted gross sales adversely and therefore the double digit progress within the Onam and Ganesh Chaturthi competition season ought to be seen within the perspective of depressed numbers of final yr resulting in a low base.

“However, the start of the competition season that kicks off from Kerala after which Maharashtra is encouraging and the trade has taken a collective sigh of reduction. Nonetheless, the continued uncertainty out there attributable to Covid and the financial state of affairs has made that sigh slightly muted,” added Srivastava.

Sustained demand has ensured that at an trade degree stock for passenger autos remained at about three weeks or 1.75 lakh models in comparison with 2.32 lakh despatches in August.

Nonetheless, the stock place is about to be inflated in September, with capacities getting ramped up on one hand and because of the inauspicious shradh interval, potential patrons will both defer the reserving. So there’s a risk that by the tip of September the inventory at sellers could improve to over 5 weeks.

To make certain, the trade will not be out of the woods but. The low base of final yr and pent-up demand is reflecting in optimistic numbers. Additionally, the primary 5 months gross sales common in FY-21 is at about 1.15 lakh attributable to lockdown versus 2.three lakh per 30 days in FY-20, so clearly there’s a pent-up demand and Covid-19 has additionally triggered the necessity for private mobility.

“Gross sales are nonetheless a lot decrease than the primary half of FY-18-19, when demand was pushed by fundamentals of the financial system. At current, erring on the aspect of lack of provide shall be unpardonable as a result of as soon as the pent-up demand is satiated and festive pleasure ends, it’s going to come all the way down to GDP progress, which is down by a major double digit,” mentioned a senior govt on the prime three automotive maker, requesting anonymity.

For the 2 wheeler phase, Maharashtra and Kerala account for 15% of the entire gross sales and each the states registered a steep decline for 5 quarters.

Hero MotoCorp registered a wholesome progress over the earlier season, with bookings larger than deliveries, indicating inventory operating out s quick at dealerships.

“In the course of the current Ganesh Chaturthi, our retail gross sales in markets throughout Maharashtra grew by a wholesome double digit over the identical interval within the earlier yr. We stay cautiously optimistic for the gross sales to proceed their upward trajectory with beneficial components such because the upcoming festive season, growing shopper confidence and continued authorities coverage assist,” a Hero Motocorp spokesperson mentioned.

The corporate mentioned demand was properly unfold out throughout rural and concrete markets and the stock on the finish of Q1 was round 30 days, the corporate will steadily construct inventory for the festive season.

From a double digit progress in festive season of FY-17, the fortunes of the trade slipped to single digit progress in cumulative gross sales (August to November) in FY-18, to low single digit to detrimental progress in FY-19 to double digit detrimental in FY-20.

August beginning on a double digit paves approach for a very good season forward for the trade. From accounting for nearly 38-40% of the general gross sales, the contribution of festive gross sales has slipped to a 3rd in FY-20, making gross sales throughout festivities roughly consistent with the remainder of the yr.