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.
