Carmakers expect better festive season despite chip crunch
NEW DELHI: Leading automakers Maruti Suzuki, Toyota Kirloskar Motor and Mahindra & Mahindra expect sales to be better this festive season compared to last year even as the chip shortage continues to make situation challenging with companies struggling to sustain production schedules.
The festive season, which began with Onam, culminates with Diwali celebrations in November.
Automakers have witnessed robust demand so far and are now looking to spruce up supplies to dealers in order to serve customers during the peak of festive period in October.
“At the moment demand looks ok. It is slightly better than last year. If we look at the bookings, enquiries, retails, these are robust. On the supply side of course we may have some adverse effects, we are monitoring that,” Maruti Suzuki India (MSI) senior executive director Shashank Srivastava told PTI.
The company would intend to build sufficient inventory before Navaratras to serve the spike in demand, but of course it all depends on the semiconductor supply situation, he added.
It is going to be a difficult task for the company as it has already announced that its vehicle production in September would be just 40% of the normal output due to the semiconductor shortage.
Elaborating on the current market situation, Srivastava noted that the sales this year were expected to be better than last year’s but these were still behind the peak years of 2017-19.
When asked if the company would be launching new products during the festive period, he said: “We can’t reveal product plans but we have been strong when it comes to the product front. We have always introduced new models, product refreshes and we intend to do the same in the future as well.”
Mahindra & Mahindra Automotive Division chief executive officer Veejay Nakra noted that the opening up of the markets post the second wave of Covid-19 has led to a rebound in overall demand and the early signs indicate a good festive season with strong demand compared to last year.
“Utility vehicles (UVs) will continue to dominate the space of festive demand contributing to almost half of the PV segment. We are committed to enhancing the festive season offerings and focussed on making the new launches a big success and are working towards transforming the way we deliver experience to our customers.
“The core focus is now to deliver a delightful customer experience, and we are leveraging all our digital tools and assets to enhance customer experience end-to-end,” he said.
Nakra noted that with the recent reveal of XUV700 and the launch of Bolero Neo in July preceded by the all-new Thar last year, the company is seeing a sizable turnaround of demand.
Given the steep increase in overall input costs, especially due to the continuing rise in commodity price, M&M has taken calculated price hikes and taken necessary steps to reduce costs, he added..