Is a festive season sales bump a myth for cars?
The gap between wholesale dispatches by automakers and the number of vehicles actually sold by dealers in the run-up to Diwali has been widening steadily for five years, new data shows, exploding the myth that this year’s low sales are a one-off caused by rising crude prices and a liquidity crunch.
The data, published by the Society of Indian Automobile Manufacturers (Siam) and Vahan, the vehicle registration website of the Union government, comes amid an outcry by dealers across the country about the substantial and continuous dumping of inventory by manufacturers even as retail sales decline.
The data indicates that the gap usually narrows after Diwali, in November and December, as manufacturers slow down production during the last month of the calendar year.
The data, accessed by Mint, has allowed a comparison over a timeline because vehicle registration figures, previously held back by the government, have now been released.
According to the data, during the two-month period to Diwali (August and September) in 2014, actual registrations of vehicles at dealers were 67.9% and 61.7% of the total vehicles dispatched by manufacturers.
In 2015, the figure was 63.7% and 60.3% in September and October. In 2016, of the total number wholesale dis- patches to the dealers by the company only 64% and 55.2% were registered and in 2017 the figure stood at 57.7% and 54.6%. In 2018 the gap widened the most to 53.8% and 52.3% in the two months to Diwali.
However, when it comes to November and December, the gap narrows significantly to 90% or more.
The data indicates that automobile manufacturers may have failed to predict the extent of the impact of factors such as crude price increases, hikes in vehicle loan rates and the stock market crash on auto sales and, as a result, continued to push inventories in expectation of healthy festive sales.
According to the data, till October this year, vehicle registrations as a proportion of wholesale dispatches never crossed the 80% mark in any of
If you only scan the headlines, you could be forgiven for thinking that the Us-china trade war is mainly about tariffs. After all, the president and trade-warrior-inchief has called himself “Tariff Man”. And the tentative trade deal between US President Donald Trump and Chinese President Xi Jinping was mainly about tariffs, especially on items like automobiles.
But the startling arrest in Canada of a Chinese telecom company executive should wake people up to the fact that there’s a second Us-china trade war going on—a much more stealthy conflict, fought with weapons much subtler and more devastating than tariffs. And the prize in that other struggle is domination of the information technology industry.
T h e arrested executive, Wanzhou Meng, is the chief financial officer of telecom equipment manufacturer Huawei Technologies Co. (and its founder’s daughter). The official reason for her arrest is that Huawei is suspected of selling technology to Iran, in violation of US sanctions. It’s the second big Chinese tech company to be accused of breaching those sanctions—the first was ZTE Corp. in 2017. The US punished ZTE by forbidding it from buying American components — most importantly, telecom chips made by Us-based Qualcomm Inc.
Those purchasing restrictions were eventually lifted after ZTE agreed to pay a fine, and it seems certain that Huawei will also eventually escape severe punishment. But these episodes highlight Chinese companies’ dependence on critical US technology. The US still makes—or at least, designs— the best computer chips in the world. China assembles lots of electronics, but without those crucial inputs of US technology, products made by companies such as Huawei would be of much lower quality.
Export restrictions, and threats of restrictions, are thus probably not just about sanctions—they’re about making life harder for the main competitors of US tech companies. Huawei just passed Apple Inc. to become the world’s secondlargest smartphone maker by market share (Samsung Electronics Co. is first). This marks a change for China, whose companies have long been stuck doing lowvalue assembly while companies in rich countries do the high-value design, marketing