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Car makers deliver over two lakh cars during festive season, post 20-30% jump in retail sales

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MUMBAI: Motown’s wheels have begun to rev up this festive season – and cars are clearly winning this drag race with bikes.

With safe personal mobility goals dwarfing other consumer priorities in the Covid backdrop, sales of sedans, hatchbacks and SUVs climbed a fifth this Navratri and Dussehra as more than 200,000 buyers reached out for their cheque books.

Bike-makers, by contrast, weren’t as lucky: Sales of two-wheelers, particularly at the price-sensitive end of the market, have been marginally lower to flat. The impact of flat bike sales was visible on the stocks: Bajaj Auto and HeroMoto both lost about 6% Monday, and were among the biggest losers on the index.

But first, the good news.

Market leader Maruti Suzuki delivered its best performance in about five years by delivering 95,000 cars. Hyundai Motor India, Kia Motors, and Tata Motors, too, registered record numbers, cashing in upon the pent-up demand in the festive season. Toyota Kirloskar delivered a 13% rise in retail sales during the nine-day period.

Bookings through the season were in lockstep with the number of cars delivered, meaning Diwali and Dhanteras would be as sparkling as the Navratras.

Hyundai Motor retailed 26,068 units, a growth of 28% over last year, whereas deliveries were higher at 30,000 units for the same period, climbing a fifth from last Navratri.

Tarun Garg, Director for Sales and Marketing at Hyundai Motor India, said the positive momentum in sales of the last few months continued during Navratri and Dussehra.

“On all parameters, the numbers are very positive. Not only have the deliveries and retails grown by over 25-30% over the same period last year, but the bookings and enquiries also have been very strong, indicating that the rest of the season will be healthy,” added Garg.

The deluxe drive
At the highest end of the spectrum, Mercedes Benz India also broke into the green during Navratri and Dussehtra, delivering as many cars as it did last year. That contrasts with a 40% decline so far in 2020 for the luxury segment.

Rural demand continues to underpin car sales.

Veejay Ram Nakra, CEO for the automotive business at Mahindra & Mahindra, said deliveries were higher than last year for the nine-day festival period. Deliveries could not match demand as supplies are getting streamlined.

“We had a very healthy booking momentum pre-Navratri and Dussehra and we continue to have a very strong pipeline of bookings. Our bookings are up over 40% in SUV’s and at an overall level…, are up about 20% during the nine days of festivals,” said Nakra. “Rural continues to drive strong numbers.”

This year’s Navratri and Dussehra included one day less than the customary 10, and the festivities were preceded by Adhik Maas (or an additional month in Hindu calendar) during which some purchase decisions and deliveries were made.

In 2019, the 10-day festival period was preceded by 15 days of shradh or inauspicious period. People usually defer bookings or don’t take deliveries during the shradh.

Bikes play catch-up
Meanwhile, two-wheeler sales remained tepid in the metros and tier one cities with commuter trains and metros remaining largely out of bounds for the public, thus reducing the need for short-haul commutes from home to the nearest suburban railhead.

Rakesh Sharma, ED, Bajaj Auto, told ET that festive sales now are flat compared to the same period last year. But considering the shutdowns, he said the flat sales growth was not surprising.

“The emphasis on 30 days of festivities is overblown and its extrapolation can be misleading. The real test will be over the next few months when the heat and dust of the season has settled. That period is difficult to predict and unfortunately, we have no other option but to wait, observe and then respond,” added Sharma.

The weekly run-rate of the two-wheelers registration for the week ended October 17, 2020, was 220,029 units, data from the Vahaan platform showed. This implies that daily sales for the week before the Navratri was around 31,432 for two-wheelers.

“Navratri retail volumes may not strictly be comparable with last year’s Navratri as this year, the festival has only a nine-day window compared with ten days in the previous year, and one day in the festival period could add 50,000-52,000 of incremental sales,” said an executive at a leading two-wheeler maker.

A Hero dealer in western UP said that the Navratri sales have been a few units lower than last year’s. Steep price increases in the entry-level segment due to new emission norms and crop payment delays have put a lid on sales in the more price elastic end of the market.

A Honda dealer in Telangana said that bike sales have been surpassing last year’s Navratri volumes, and supply constraints could affect bike volumes ahead of Diwali. Scooter sales remain muted.

The month-long period between the start of Navratri and Diwali typically accounts for about double the monthly average of the year for two- and four-wheeler sales. A large part of this demand is in the North and East, which together account for 50-55% of total sales of two-wheeler and passenger cars. At its peak, though, the festive season would report 3.5-4 times the usual monthly run-rate.


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Maruti Suzuki Subscribe extends services to 4 new cities

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NEW DELHI: Maruti Suzuki on Tuesday announced it will be extending its subscription services to Mumbai, Chennai, Ahmedabad and Gandhinagar. The Maruti Subscribe program is almost 4 months old now.
The Maruti Suzuki Subscribe program began in Delhi NCR and Bangalore initially and will now operate in 8 cities in total. The subscription program was recently launched in Hyderabad and Pune. The Maruti Suzuki Subscribe scheme allows customers to use a brand-new car by paying an all-inclusive monthly fee that covers maintenance and insurance for the complete duration.
The current subscription fleet includes Swift, Dzire, Vitara Brezza and Ertiga from Maruti Suzuki Arena and Baleno, Ciaz and XL6 from the Nexa range. Customers will get a white number plate with the registration done under their names in the operational cities.
The cars can be subscribed for a fixed tenure of 24, 36 or 48 months. The lowest subscription scheme in the 4 new cities starts at Rs 14,665 for Swift LXI in Ahmedabad, while the same scheme costs Rs 14,691 in Gandhinagar, Rs 15,196 in Chennai and Rs 15,368 in Mumbai.
The scheme is inclusive of road tax, registration charges and insurance. Additionally, complete mainatainence and 24×7 road side assistance comes as part of the package.
“The Maruti Suzuki Subscribe program has received encouraging response from the customers. We have received over 6,600 enquiries in the first few months of pilot launch. We are delighted to introduce the program in Mumbai, Chennai, Ahmedabad and Gandhinagar.We are aiming to introduce the Maruti Suzuki Subscribe program in 40-60 cities over a period of 2 to 3 years,” said Shashank Srivastava, Executive Director, MSIL.


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GM withdraws support for Trump’s emissions lawsuit against California

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President Donald Trump delivers remarks at American Center for Mobility in Ypsilanti, Michigan with General Motors CEO Mary Barra and other auto industry executives on March 15, 2017. 

Nicolas Kamm | AFP | Getty Images

General Motors is withdrawing from litigation led by the Trump administration against California over the state’s right to set its own fuel economy and emissions regulations, distancing itself from President Donald Trump.

In a letter Monday to environmental leaders, GM CEO Mary Barra said the company’s decision to withdraw from the litigation is effective immediately. It follows President-elect Joe Biden’s Nov. 3 election, his support for electric vehicles as well as his call for unity in the country, she said.

“We believe the ambitious electrification goals of the President-elect, California, and General Motors are aligned to address climate change by drastically reducing automobile emissions,” Barra wrote.

By withdrawing, GM is showing support for the incoming administration while distancing itself from Trump, who has publicly praised and condemned automakers during his tenure as commander in chief. GM has plans for a robust portfolio of electric vehicles in the coming years.

The White House did not immediately respond for comment.

Biden is widely expected to drop the litigation against California and allow the state to set its own standards. California was allowed to do so under a 2013 waiver it received under the Clean Air Act. Other states were allowed to adopt those standards as well.

The Detroit automaker along with Fiat Chrysler, Toyota Motor and other smaller automakers initially supported Trump’s efforts in late-2019. Trump at the time was fighting to rollback the Obama administration’s national emissions standards and strip California and other states of the right to set their own vehicle emissions regulations.

Four other major automakers — Ford Motor, BMW, Honda Motor and Volkswagen — reached a deal with California in July to toughen the gas mileage and emissions standards, drawing ire from Trump.

Barra invited other automakers involved in the lawsuit to “join us” and withdraw from the litigation. Fiat Chrysler and Toyota did not immediately have a response to GM’s call to withdraw from the lawsuit.

GM’s decision comes days after the automaker announced plans to spend $27 billion on all-electric and autonomous vehicles through 2025, an increase of $7 billion, or 35%, from initial plans announced in March


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Govt plans to set up charging infrastructure across 69,000 petrol pumps

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New Delhi: The government is planning to set up at least one e-charging kiosk at around 69,000 petrol pumps across the country with an aim to accelerate the uptake of electric vehicles, Union minister Nitin Gadkari said on Monday.

The Road Transport and Highways Minister while addressing a virtual conference said that the government has taken several steps to promote electric vehicles which include reduction in GST to 5 per cent, allowing delinking of battery cost of 2-3 wheelers from vehicle cost as it accounts for nearly 30 per cent of the cost etc.

“Battery charging ecosystem is very important…government is planning set up at least one electric vehicle charging kiosk at around 69 thousand petrol pumps across the country to induce people to go for electric mobility,” the minister was quoted as saying in a release. Stressing that India is poised to become a global automobile manufacturing hub in the next five years, Gadkari asked the automobile industry to push for manufacturing flex engines which have versatility to use petrol or ethanol/CNG as fuels.

“Our auto industry has made significant strides in terms of development of different designs and models, robust R&D, huge market, stable government frame-work and bright and young engineering minds. India already is the largest manufacturer of two-wheelers in the world,” he said.


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