December Delight for car makers in India, industry set to post record despatches of 2.78 lakh | Economic Times

Mumbai: The passenger vehicle industry in India is set to record its fifth straight month of double-digit sales growth in December, ending an eventful year that witnessed almost 50 days of no or low sales and a total disruption in the mobility space.Dispatches from factories this month are expected to be 2.78 lakh units, the highest on record for any December and a 17-18% increase from a year earlier. Retail sales are estimated to be around 80,000 more at about 3.6 lakh units, leaving the industry with the lowest ever closing year-end stock at about 1 lakh units.In the last five years, December sales have been in the range of 2.30-2.40 lakh units, or 7-8% of the volume for the whole year. This December, this share is set to increase to 11%.Dealerships have reported strong sales in the first 20 days of this month. But the momentum waned since, because of non-availability of popular models. 80019363Maruti Suzuki executive director for sales and marketing Shashank Srivastava declined to give any guidance on December numbers, but said it had been a “unique and a different” month when compared to yesteryears.He said the industry inventory level in December was quite low at 167,000 units as against 28,7000 last year. As a result, sales promotions had also been lower. The rollover of production to next year is also missing due to maintenance shutdowns, he said.“Ever since the lockdown was lifted, the pent-up demand has bounced back faster than the supply and as a result, with supply chasing demand, the stock levels have been low,” added Srivastava.The channel inventory after June has averaged at 21-25 days, which is almost a couple of weeks lower than normal. With the industry starting 2021 with just 15 days of stock at the dealerships and a lower inventory in transit as vehicle makers decided to take block closure on account of maintenance, there is a significant space for vehicle makers to start 2021 on a very strong note.A top executive at a leading carmaker said retails maintained a good momentum in December, even as stock was fast receding in the channel.The pent-up demand coupled with the expectation of a recovery in replacement demand is likely to help sustain double-digit volume growth in 2021, added the executive, requesting anonymity.