Data collected until Friday showed December retailing of passenger vehicles could touch the 400,000 mark in the world’s fourth-largest automotive market, where customers typically need inducements to buy cars in the last month of the calendar year. In December 2018, retail sales of passenger vehicles were at 382,000 units, considered a monthly record until now.
Liquidation of stocks by auto dealers ahead of the April 1 introduction of Real Driving Emission (RDE) norms helped reduce showroom stock, said Shashank Srivastava, executive officer, Maruti Suzuki India.
“The ability to provide discounts for certain models has increased considerably and dealers are unlikely to have high inventory on their books,” said Srivastava. “This may take December 2022 retail PV volumes to their highest ever.”
‘SUVs Lead the Pack’
He expects December 2022 PV retail volumes to be around 400,000 units, with several dealers seeking slimmer inventories before the introduction of RDE norms that require cars to have self-diagnostic kits to monitor tailpipe emissions real time.
High Compliance Costs
Making vehicles compliant with RDE norms would make smaller diesel cars commercially unviable; hence, several car models, especially those at the end of their life cycles, are being phased out before the switchover deadline. Tarun Garg, director-sales and marketing, Hyundai Motor India, concurred that sales are brisk.
“Retail momentum in December is very strong on the back of improved availability of vehicles and positive customer sentiment,” Garg said. “Demand traction is seen across segments, with SUVs leading the pack.”
The sales head at a leading auto manufacturer said that the combination of pre-buying ahead of new norms, attractive discounts and the likelihood of imminent price escalation boosted retail sales. Several carmakers have said ex-showroom prices will be raised in January.
“Typically, there is a 10-15% difference in figures between retail numbers reported by carmakers and registration data reflected on the Vahan portal due to a lag of 10-15 days,” said the executive. “This difference stretches at the end of the year as a lot of customers want to take delivery in the new year.”
To be sure, some in the industry believe that December sales will include advance dispatches meant originally for January.
“I think it is a stretch and a lot of it, if done, will amount to advance retailing, which will then reflect a drop in retail numbers in January,” said a top official at another passenger vehicle maker. “I think rural areas are still slow, especially for the below Rs 10-lakh category, and hence I don’t think the industry will reach the 400,000 mark.”
