Supply constraints to hit festive sales
Demand remains robust: Dealers suggest demand remains strong despite
increase in interest rates and prices. However, supplies remain an issue.
Supply not catching up with demand: Production constraints persist due to
vendor capacity issues. Low system inventory will result in subdued festive
sales and strong demand in a lean post-festive season. System inventory is
the lowest in two-wheelers.
Floods aggravate problems: Floods in North India affected supplies further
and also hampered truck movement. Hero Honda is the most affected.
Customer’s warm-up to new players: New players in the compact car
segment like VW, Ford and Nissan have witnessed strong response. Strong
demand environment and aggressive marketing and pricing by new players
are boosting acceptance.
No respite in discounting in the car market: Despite strong demand,
discounts continue to remain high.
No significant pre-buying seen in MHCVs: Not much pre-buying seen ahead
of the probable emission norms change from 1 October. Technically BSII
trucks can be sold till November, leading to strong YoY growth even in 3Q.
New launches: a) VW Vento went on sale this month and received an order
for 4,000 units, b) Hero Honda launched Splendor Pro, c) Hyundai launched
the New i10 with several improvements and d) Suzuki Motorcycles launched
Slingshot, a 125 cc bike.
Expect TVS Motor, Maruti Suzuki and Bajaj Auto to post life high
numbers.
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