“Post Diwali we have seen good enquiry level and good booking level as well,” said Shashank Srivastava, ED-Marketing and Sales, Maruti Suzuki in an interview with CNBC-TV18. “...that is why manufacturers are very confident about December (sales),” he said.
According to him, this year’s November month has been very unusual because in a normal year, there is a lot of inventory in the factory.
“However this year, because there was a rupturing of supply chain in Q1, there has been no build up of stocks in the factories. So what you produce is what you are able to wholesale. That production for November in most manufacturers – especially in North – is lower because of the large number of holidays in the month of November,” he said.
“Retail in November was 3,33,000 units whereas wholesale is just 2,88,000 units. So there is a gap of almost 46,000-47,000 units between wholesale and retail,” he mentioned.
“On the retail side, the small car sector has grown. The other sector which has grown for a different reason is the SUV segment – a lot of new models have been introduced in this sector,” he said.
He believes the long-term demand for the auto industry would depend on the fundamentals of the economy. “The demand in auto sector is very closely correlated with the gross domestic product (GDP) per capita income growth,” he said.
“Automobile is a discretionary purchase being a high-value item in our country. There the sentiment also plays a large role and the sentiment today depends entirely on the COVID situation. That is why because of uncertainty both on the COVID front and also regarding how the different sectors of the economy or the fundamentals will move, manufacturers in auto industry are a little hesitant to give a forward guidance,” Srivastava said.
For entire discussion, watch video...
(Edited by: By Santosh Nair)
First Published: IST