The expected inventory is a 7.6% jump from September 2019 levels when car inventory had reached around 300,000 units.
The sales push also comes as companies seek to make the most of the new model launches and an eased availability of semiconductors. The latter had weighed on the festive season sales last year.
Encouraged by an overall positive sentiment and a flurry of new launches, carmakers are prepping up for record sales during the three-and-a-half-month period of the festive season, which has begun with Onam and will end with Bhai Dooj in November. The festive season in India, marked by the purchase of high-ticket items, accounts for 25-30% of a carmaker’s annual sales.
“With production getting better since July, there has been a build-up of inventory in the retail network in anticipation of this large volume. The expected network stock levels should be above 300,000, a level seen earlier almost 4 years back in September 2019,” said Shashank Srivastava, senior executive officer-sales and marketing, Maruti Suzuki India.
Others agree. “The stocks will easily surpass the 2019 levels given the current scenario marked by production ramp up at most companies,” said an executive at a car company.
In anticipation of a very good festive season, automakers have been pumping up inventory, said Manish Raj Singhania, president, Federation of Automobile Dealers Association. “As of now, we are not worried as the retails are also touching new highs every month.” The only red flag, he pointed out, could be an increase in interest rates and inflation. Interest rates on car loans have gone up from 7.25-9% last festive season to 8.5%-10% now, he said.
Car sales in India, which have been advancing at a fast pace for over the last two years, are expected to see record dispatches in August breaching the previous high of 355,000 seen in September 2022, said industry sources. August will be the eighth month in a row when dispatches to dealers are likely to be more than 300,000 units taking cumulative sales to 2.7 million units so far in 2023. The festive push and traction of new models could lead to volume growth of 5-7% in the second half of 2023, compared with earlier estimates of flattish sales.
In addition to face-lifts and new variants, addition of new models by top carmakers – all in the utility vehicle segment – as a run-up to the festive season is fuelling high dispatches. While car market leader Maruti has launched four new models – Jimny, Fronx, Grand Vitara and Invicto – since the beginning of this fiscal, Hyundai Motor India re-entered the high-volume segment with the launch of the Exter, a micro-SUV.
Toyota Kirloskar Motor India too has brought back the excitement with multiple launches in the utility vehicle segment including the Hyryder, HyCross and Rumion. After a hiatus from new model launches, Honda Cars India introduced the Elevate, its mid-size SUV offering, Citroen is hoping to make a mark in the competitive segment with the C3 Aircross.