Get set, go! Motown gears up for festive rush

Mumbai: LUV – we seem to be re-learning the alphabet everyday as economists of all stripes try to explain the trajectory of the economic recovery underway. But for a true assessment of the prevailing consumer sentiment, it’s best to visit an auto dealer: They are finally doing good business because of strong recovery.Car, two-wheeler and tractor makers are set to register unit volume growth of 15-30 per cent in September, the quickest pace of growth in two years, building on the growth registered in August.At 2.8-2.9 lakh, the car market is set to witness a 26-30 per cent growth, the highest in 27 months. Two-wheeler dispatches of 1.88 to 1.9 million would mean a growth of 15 per cent, the highest seen in 24 months. In tractors, sales of 100,000 to 110,000 units would be the highest absolute level in 11 months, likely registering a growth of 20 per cent year on year.The strong growth numbers are on account of sustained demand for personal mobility, healthy offtake in rural areas and inventory push by vehicle makers ahead of Navratri, Dussehra and Diwali.For the greater part of the year, retail was higher than wholesale due to supply chain disruptions. But in September, dispatches are higher than retail due to the inauspicious Shradh period during which buyers refrain from taking car deliveries.Shashank Srivastava, ED, sales and marketing at Maruti Suzuki, told ET that while it may not be proper to conclusively comment on September sales, it is likely that wholesale dispatches would exceed retail significantly. “The subdued retails may be in line with expectations because of the Shradh month followed by the Adhik Maas. And equally expectedly good wholesales would be a reflection of normalised production and that of dealers increasing stock levels in preparation for the upcoming festival period,” he added.To be sure, car retailing for September is seen at around 2.3 lakh, which is flat when compared with August, but lower than in September 2019.Rakesh Sharma, ED at Bajaj Auto declined to give specific numbers but said retail sales for the industry in September are likely to be flat. While there would be a growth, it is likely to be on the basis of dispatches which have been pushed to be ready for festive season. “September of 2019 is not directly comparable to September of 2020. Last year September, the number of inauspicious days were fewer and the tail end of the month saw the first few days of Navratri which supports retails, but this year, the entire 15 days of Shradh or inauspicious period was in September and there were no festive days, which reflects in the retail,” added Sharma.However, the booking and enquiry momentum has not slowed down, with most seeking deliveries during festivities, even as retails are expected to be lower than dispatches.Nomura expects Maruti’s domestic sales volume at 150,000; Emkay sees domestic volumes for Maruti at 142,000 in September. Growth rates across segments are expected to appear significantly higher because of the low base of last year.

from Economic Times https://ift.tt/2Gc0thB