[Auto] Long wait beyond 1-2 months forcing auto dealers to reject customer bookings

[_Happy boy]

At least half the car models in the market are not accessible immediately with customers forced to wait up to eight months, making dealers change their booking pattern.

Dealers of passenger vehicles (PVs) are not accepting bookings for vehicles whose delivery may not take place within two months from the date of booking according to a senior executive of the Federation of Automobile Dealers Association (FADA). This executive did not want to be named.

Booking amount

This means dealers forgo the booking amount from buyers. The amount actually isn’t much and certainly not worth the trouble automobile dealers often have to face in the form of enquiries from buyers.

FADA boss Vinkesh Gulati said his organisation does not have any data on the total amount of money held by dealers in the form of booking amounts. “But this amount is not huge. Booking amount starts from Rs 5,000 to Rs 10,000 and varies from manufacturer to manufacturer. For the Thar, for example, it is Rs 21,000, whereas for Magnite, it is Rs 5,000,” Gulati said.

Typically, a dealer accepts a total of 150-200 bookings, which are from a vast network of dealerships.

Car market leader Maruti Suzuki, for instance, has nearly 1,400 dealerships while Nissan has around 123. The booking amount thus parked with dealers is negligible.

A mix of healthy demand and low supplies from manufacturers has led to unusually low inventory levels at dealerships, which, at the end of January, stood at just 10-15 days against the usual 35-40 days for PVs.

“The demand is very good but the point is that we are losing a lot of opportunities because of the shortage in supply. And now, slowly the waiting is affecting fast-moving products also. At least 50-70 percent models are on a waiting list and are not available across the counter,” Gulati said.

Peak capacities, semiconductors shortage main factors

Manufacturers are struggling to raise production either because many are operating their production lines at peak capacities or are facing a supply shortage of semiconductors.

Models like the Mahindra Thar, Nissan Magnite, Kia Sonet, Hyundai Venue, Maruti Wagon R, Maruti Ertiga, Tata Nexon, Hyundai Creta, Kia Seltos, Tata Altroz and Hyundai i20, many of which have been launched in recent months, carry a waiting period of several weeks.

Mahindra & Mahindra, for instance, is struggling to increase the production of the Thar because it cannot get the required number of semiconductors from its supplier Bosch. This has led to the Thar’s waiting period stretching to an unprecedented nine months.

“The dealer, on his own, avoids taking bookings for more than a month or two because it becomes very difficult to handle customers later,” added Gulati.

Newly launched Nissan Magnite, which is available in 36 combinations, has amassed cumulative bookings in excess of 35,000 units since its launch in December. Its waiting period has increased to six months on certain variants. Nissan, which has been delivering the Magnite since December, has not shared pending orders for Magnite.

Though decadal low auto loan rates, attractive finance options and robust demand from non-urban pockets have helped turn around market sentiments faster-than-expected and the surge in demand has stayed even after the festive period, there’s a short supply.

Maruti Suzuki, which does wholesales of about 140,000 units a month, has a pending order for about 215,000 vehicles. Its dealers, like the rest of the industry, are running an all-time low stock. Till now, Maruti Suzuki’s production has not been impacted by the semiconductor shortage.

“Things will start looking good by April, and, by June, supplies are expected to become normal,” added Gulati.