Manufacturers report unexpected post-festival surge in demand.
The bad old days of waiting periods for cars seem to have returned, with manufacturers reporting an unexpected surge in post-Diwali sales, forcing customers to wait a month to as much as four months for almost all models from the Swift to the Honda City.
Maruti Suzuki’s newly-launched hatchback, Ritz, reportedly has a waiting period of over two months, while buyers will have to wait for up to four months for the upper-range Honda City models. The average waiting period for the car is six to eight weeks.
What has come as a pleasant surprise to car makers is that the queues haven't shortened even a month after the festive period.
Pawan Goenka, president (automotive sector), Mahindra & Mahindra (M&M), said, “We are running our plants to full capacity, which is unusual during this time of the year. November-December demand is much stronger than usual.”
According to Goenka, the Xylo (a multi utility vehicle), Scorpio (a sports utility vehicle) and the Bolero (an MUV) have an average waiting period of two to three weeks. M&M is India's largest manufacturer of utility vehicles.
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Similarly, Korean car brand Hyundai Motors has reported a sustained demand boom for its flagship models, i10 and i20, after Diwali.
Arvind Saxena, senior vice-president (marketing and sales), Hyundai Motor India, said, “Retail demand now is at least 20 to 25 per cent more than last November.”
Auto players said the sustained boom in car sales was a result of the pent-up demand in the earlier quarters, attractive interest rates on vehicle loans offered by banks, discounts and other financial benefits offered by the manufacturers and the general fear of a rise in both automobile prices and lending rates in the coming months.
Kotak Mahindra Prime, the car financing subsidiary of Kotak Mahindra Bank, raised vehicle interest rates 50 basis points a couple of weeks ago, but that hasn't impacted demand.
Sumit Bali, chief executive officer, Kotak Mahindra Prime, said, “The momentum in demand this year after the festivals has been well carried over. There is a strong growth momentum in vehicle off take. Interest rates are manageably lower and should not move upwards too much in the coming months. That’s a positive for the sector.”
The two-wheeler market isn’t far behind, with both Hero Honda and Bajaj Auto showing a waiting period after many years.
Anil Dua, senior vice president, marketing, sales and customer care, Hero Honda Motors, said the festival spirit was spilling over, as was evident from the surge in demand in November as well. “We had earlier said that we will sell four million units this year but now we are confidently saying we will cross that target handsomely.”
Dealers say the waiting period for diesel cars is “just going through the roof”. The Swift Dzire diesel model has a waiting period of over three months. The same is true for the diesel models of the Swift and Ritz.