BQ Survey | Auto Dealers Don’t Want To Celebrate Sales Uptick Just Yet

Dealers of cars and two-wheelers remained cautious even as retail sales picked up in December on the back of year-end discounts, according to a BloombergQuint survey of eight large dealerships.The pick-up comes ahead of the new year when automakers usually hike prices of popular models.“We are seeing an uptick in sales for all our dealerships with stockout situation in case of certain models and variants,” R Chandrashekhar, executive director of Regent Honda & Kamal Hyundai, said. “Additionally, prices increase from the new year. All these factors combined have also led to faster purchase decision by buyers.”Agreed, Nikunj Sanghi, managing director at JS Fourwheel Motors Pvt. Ltd., a dealer for Mahindra & Mahindra Ltd. and Hero MotorCorp Ltd. “The month (December) started on a positive note as we saw demand follow through over November,” he said. “This is largely due to customers lapping up the high discounts and promotional offers run by automakers.”Retail auto sales, measured by vehicle registrations, clocked a 2 percent year-on-year growth in November, according to data released by the Federation of Automobile Dealers Associations. This was the second straight monthly jump after sales snapped their worst streak of declines in decades as discounts during the festive season lured buyers.Vinkesh Gulati, director at United Automobiles, a dealer of Mahindra vehicles, however, cautioned that dealerships may not be able to meet expectations despite the rise seen in enquiries and footfall over the last few days. “Typically, buyers tend to wait out their purchase till the last date. So we saw some moderation in demand after a strong start to the month,” he said.December may just prove to be an aberration as dealers remain nervous over the outlook. While the ongoing month saw attractive offers, there are concerns if demand will sustain, said another dealer who spoke to BloombergQuint on the condition of anonymity. Although the liquidity situation has improved from pre-festival months, it still remains below the normal levels, an indication of continued weakness in consumer sentiment, he said.That’s expected to reflect in factory-gate sales..Wholesales Likely To FallWholesales, or factory dispatches, are expected to fall in December, according to BloombergQuint’s poll of four brokerages. Maruti Suzuki India Ltd., the nation’s largest carmaker, is expected to see a small uptick. Inventory management and new models put the company in a better position..Here are the factors, according to Nomura, that could impact wholesale volumes for individual automakers in December:Ashok LeylandDemand continued to remain under pressure on the back of over-capacity, subdued economy and lower viability of fleet operators.Bajaj AutoDomestic wholesales to grow on strong retails; Export of two-wheelers to sustain growth.Eicher Motors – Royal EnfieldDomestic wholesales to decline on weak retails.Hero MotoCorpWholesales to remain slow on weak retails.MarutiHigher year-end discounts and new product launches, to benefit wholesales.M&MMuted demand and high competition to impact utility vehicles, Tractor sales to remain subdued.Tata MotorsWeak demand due to overall slowdown, high competition and inventory de-stocking before BS VI to keep wholesales subdued.TVS MotorsWeak retails to impact wholesales.Watch | Auto dealers hold back on celebrations

BQ Survey | Auto Dealers Don’t Want To Celebrate Sales Uptick Just Yet

Car and two-wheeler dealers remained cautious even as retail sales picked up in the last month of the year.

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