FADA Expects Lukewarm Sales This Festive Season Due To Longer Waiting Periods On High Volume Models

Longer waiting periods of high-volume models could lead to a lukewarm festive season this year for the auto industry in terms of sales. The Indian auto industry has been reeling with the supply chain constraints for the last two years and the semiconductor chip shortage has crippled the supply of inventories at dealerships. There's been a major demand and supply mismatch in the last couple of years, leading to a longer than usual waiting period across models, which in case of some high-volume models exceeds more than a year.

Also Read: Hyundai Has Backlog Of 1.30 Lakh Units 

Speaking with carandbike, Manish Raj Singhania, President- Federation Of Automobile Dealers Association (FADA) said, "Automakers need to prioritise the models and variants that are more in demand. Such long waiting periods are not healthy for the industry. Four to six months is okay, but beyond a year, we're not addressing their (customer) requirement. So it would be very difficult if a customer now decides that he/she wants a vehicle in the festive month. As a dealer if I have got bookings pending from last November, how can I give the vehicle to a new customer. Obviously, that vehicle will go to November, December bookings or January bookings, from last year's. So I need to address that first. And now with the model tracking system also, company updates them whenever there's dispatch of vehicles. So OEMs are keeping their customers informed about when they'll get their vehicles. So if a customer right now decides to go for a heavily booked vehicle during the festive months, that's not possible."

Also Read: 4 Month Waiting Period For First 25,000 Units Of Mahindra Scorpio-N

Though the industry is on a recovery run trying to strengthen its supply chain, delivering adequately during the upcoming festive period will continue to be a challenge for the auto industry this time around. There's been no dearth of new launches, especially in the burgeoning SUV segment, which have spurred the demand in the auto industry. For instance, India's largest carmaker, Maruti Suzuki already has a waiting period of around 8 months for the Vitara Brezza subcompact SUV while Hyundai India has a waiting period of up to 4 months across models, with models like the Creta attracting even higher waiting periods. Mahindra is on a dream run with the XUV700 and new Scorpio-N, both bagging over 1 lakh bookings and attracting a waiting period of over a year. 

That said, Singhania also mentioned that overall sales will go up and retail numbers will be higher as manufacturers are producing more and whatever they are producing they are selling more. Though dealerships are low on inventory, but have been maintaining a smooth flow of stock. As per the data released by The Federation of Automobile Dealers Associations (FADA) last year for October 2021, overall retail sales stood at 13,64,526 units (including passenger cars and SUVs, two-wheelers, three-wheelers and commercial vehicles. This figure was lower by over 5 per cent compared to October 2020, and a whopping 26 per cent down compared to the pre-COVID times of October 2019. The auto industry was right on the brink of the chip shortage during the festive season last year and situation has been gradual improving since the last quarter of 2021. Hence, festive season sales are expected to be slightly better than the 2021 festive season period.