India’s auto industry is witnessing a surge in festive demand, but vehicle makers are facing delivery roadblocks due to a shortage of trucks, trailers and rare earth magnets, The Times of India reported.
The situation has left carmakers racing against time to ensure customers get their vehicles around Dhanteras and Diwali.
Car and two-wheeler sales have picked up sharply after GST cuts came into effect on September 22, with factories dispatching an estimated 3.75–3.8 lakh vehicles in September, a 5–6% increase over last year. Retail sales, however, have soared even more, rising roughly 25% as customers took advantage of tax cuts, festive offers, and Navratri timing.
Industry officials told TOI that the sudden rush in demand across automobiles, FMCG, ecommerce, fashion and lifestyle sectors has created “huge pressure on the truck industry with fleets working round-the-clock to deliver across the country.” An official added, “Add to this the usual gifting rush around Diwali and you have a problem that is increasingly becoming very challenging to solve.”
Nalinikanth Gollagunta, CEO of M&M’s automotive division, said, “Surge in festive demand has led to significant constraints on availability of trailers. We are working to improve dispatches to our dealer network within constraints.”
Maruti Suzuki too is struggling to meet demand after the GST-driven revival in small car sales. “We have pending deliveries of 2.5 lakh vehicles, and most people prefer it around Diwali. We are working overtime and are now using railways to ensure that dispatches happen faster and on time,” Partho Banerjee, senior executive officer (marketing & sales) at Maruti Suzuki, told TOI.
Banerjee had earlier told ET that the first eight days of Navratri alone saw 165,000 retail units, likely to cross 200,000 by the festival’s end.
Amit Kamat, chief commercial officer at Tata Motors Passenger Vehicles, said the demand spike began after September 22 when GST cuts kicked in. “We expect this surge to be temporary and are working with logistics partners to expedite dispatches… Despite challenges, we are working tirelessly to expedite deliveries to our dealerships in time for Diwali celebrations,” he said.
Luxury carmakers are not immune either. Hardeep Singh Brar, president and CEO of BMW Group India, said, “Customers like to take the delivery on Dhanteras and Diwali. This year, demand for deliveries on these specific days is much higher as pent-up demand from Aug-Sept is also coming into play… When the bottleneck suddenly opened, there were certain logistics challenges in the start, but they are streamlined now.”
Two-wheeler makers face a dual blow — logistical challenges and a shortage of rare earth magnets, a critical component for electrics. A top official of a leading company told TOI, “The cut in retail prices has meant that there has been a sudden rise in demand for scooters and motorcycles. Rare earth magnet issue is hampering production. Sudden rush in bookings is leading to pressure on deliveries.”
TVS Motor, Bajaj Auto, and Royal Enfield all reported strong growth, with Royal Enfield posting a 43% jump in September sales. In commercial vehicles, Tata Motors and Ashok Leyland recorded 16% and 7% growth, respectively, while the farm equipment segment saw Mahindra tractors rise 50% in domestic sales.
(With inputs from TOI)
The situation has left carmakers racing against time to ensure customers get their vehicles around Dhanteras and Diwali.
Car and two-wheeler sales have picked up sharply after GST cuts came into effect on September 22, with factories dispatching an estimated 3.75–3.8 lakh vehicles in September, a 5–6% increase over last year. Retail sales, however, have soared even more, rising roughly 25% as customers took advantage of tax cuts, festive offers, and Navratri timing.
Industry officials told TOI that the sudden rush in demand across automobiles, FMCG, ecommerce, fashion and lifestyle sectors has created “huge pressure on the truck industry with fleets working round-the-clock to deliver across the country.” An official added, “Add to this the usual gifting rush around Diwali and you have a problem that is increasingly becoming very challenging to solve.”
Nalinikanth Gollagunta, CEO of M&M’s automotive division, said, “Surge in festive demand has led to significant constraints on availability of trailers. We are working to improve dispatches to our dealer network within constraints.”
Maruti Suzuki too is struggling to meet demand after the GST-driven revival in small car sales. “We have pending deliveries of 2.5 lakh vehicles, and most people prefer it around Diwali. We are working overtime and are now using railways to ensure that dispatches happen faster and on time,” Partho Banerjee, senior executive officer (marketing & sales) at Maruti Suzuki, told TOI.
Banerjee had earlier told ET that the first eight days of Navratri alone saw 165,000 retail units, likely to cross 200,000 by the festival’s end.
Amit Kamat, chief commercial officer at Tata Motors Passenger Vehicles, said the demand spike began after September 22 when GST cuts kicked in. “We expect this surge to be temporary and are working with logistics partners to expedite dispatches… Despite challenges, we are working tirelessly to expedite deliveries to our dealerships in time for Diwali celebrations,” he said.
Luxury carmakers are not immune either. Hardeep Singh Brar, president and CEO of BMW Group India, said, “Customers like to take the delivery on Dhanteras and Diwali. This year, demand for deliveries on these specific days is much higher as pent-up demand from Aug-Sept is also coming into play… When the bottleneck suddenly opened, there were certain logistics challenges in the start, but they are streamlined now.”
Two-wheeler makers face a dual blow — logistical challenges and a shortage of rare earth magnets, a critical component for electrics. A top official of a leading company told TOI, “The cut in retail prices has meant that there has been a sudden rise in demand for scooters and motorcycles. Rare earth magnet issue is hampering production. Sudden rush in bookings is leading to pressure on deliveries.”
TVS Motor, Bajaj Auto, and Royal Enfield all reported strong growth, with Royal Enfield posting a 43% jump in September sales. In commercial vehicles, Tata Motors and Ashok Leyland recorded 16% and 7% growth, respectively, while the farm equipment segment saw Mahindra tractors rise 50% in domestic sales.
(With inputs from TOI)
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