If the worthy reader too cannot keep up with the barrage of news on price cuts being offered by various automobile assemblers over the past few months, they may not be alone except if they are a keen watcher of the industry, a car aficionado if one may, or simply a prospective car buyer. Indeed, major automakers have slashed prices one after another, pushed perhaps more by regulation than to appease the consumer. But the latter may not have escaped assemblers altogether either. In Apri-24, the fruits of labor thus far are being plucked.
Total volumes for passenger cars, LCVs, and SUVs stood at 10,515 for the month, the highest in 14 months, beat only by Jan-24, when volumes exceeded this number by 21 units. That month, the SUV/LCV segment shone, with impressive performances by Sazgar’s Haval, Toyota Hilux, and Hyundai’s Santa Fe as well as Tucson. Suzuki’s swift too made a comeback. In Apr-24, it is almost singlehandedly Suzuki’s Alto that jumps out with volumes at 4,786 units, the highest in 15 months. The main boost comes primarily through passenger cars, though SUVs and LCVs are not too far behind.
Volumes have improved since the third quarter of the fiscal year began on Jan-24. To compare, in the first quarter (FY24) total passenger cars sold stood at 5,340; in the second quarter, sales slid to 4,880, only to recover substantially in the third quarter at 7,809 units. The trajectory is upward.
But that is about the only good news thus far. By comparison, automobile sales have had quite a fall from grace. Coming from a massive lift in the volumes during FY22 to a quieter of a year that was FY23; the year FY24 has been more than a dampener. In 10FY24 thus far, total volumes (passenger cars, LCVs, and SUVs combined) slid 45 percent, which would appear more stark considering in 10FY23, volumes were down 49 percent year on year. In fact, in 10MFY22, total sales were 2.8 times the current volumes achieved by the industry.
Hefty car payments—if a consumer were to draw on a bank loan—have stayed buyers away from financing, while cash buyers have had to contend with significantly costlier vehicles which one could argue may just not be worth it. Considering also that few have that kind of cash just lying idle to spend on cars. At such a time, dealers/investors that have been flexible in selling off their inventories—in terms of offering installment plans for instance—may have had more success. Overall, the “on” paid by the market on several cars that are in demand was found missing.
Companies had little to offer consumers except for excuses—for high prices, delivery delays, and booking halts. This kept car buyers off and out of the market. Now after slashing prices, there may be renewed interest which is visible from a slow(er) recovery in volumes. Kia’s offering of the staggering discount on its Stonic may however seem like trickery as the company announced it was “fully booked” till Sep-24, and will not be fulfilling new orders. This does suggest one thing though. Demand for vehicles is still here, eagerly bubbling under the surface, biding only for a time, a slight indication that a price may get slashed, or a tax may get cut, or the interest rate may come down. It will be up and thriving as soon as policymakers are ready for demand to rebound. That may not happen in the upcoming budget. And so, car buyers will wait.
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