Tata Motors' Top Dealership Expects 1.7X Jump In Sales Courtesy Festive Boom
Treo Tata expects to see a nearly two-fold jump in passenger car sales in October.
Driven by high festive demand, Treo Tata is expected to see a nearly two-fold jump in passenger car sales in October compared to other months, according to the company’s Managing Director, Ajay Agarawal.
Treo Tata, the largest dealership of Tata Motors in New Delhi, has seen encouraging footfalls at its showrooms and a spike in booking for passenger vehicles in the first 10 days of October amid the Navratri-Dussehra festivities. The company has seen an 8-10% rise in bookings compared to the same festive period last year, according to Agarawal.
"We have seen around 2X walk-ins compared to the same period last month. We have a healthy pipeline of bookings. Compared to last year, we have around 8-10% growth in bookings. As of now, deliveries have been good in the NCR. We are already close to the Vahan numbers of last month," he said.
Agarwal noted that the demand trend observed during Navratri was expected to continue throughout October as buyers prepared for Dhanteras and Diwali. He predicted October would be "very, very good" for auto deals.
"What we have seen primarily in North India is that whatever we do in these nine days or 10 days of Dussehra and Navratri, we do almost two and a half times by Dhanteras. So, October will be almost 1.72x of the normal months. For example, I call July-August-September average, so this month will be 1.72 times the normal months," Agarawal added.
According to him, the liquidation level during October 2024 would be much higher than what most dealers anticipated. "I see a ballpark of 20-25% correction in pending inventory levels at the dealer point," he claimed.
Agarwal credited the schemes offered by OEMs for driving the demand. He mentioned that the passenger vehicle demand was down nearly 18-20% as customers held back purchases in anticipation of better offers. "There was so much news in the market about high inventory levels and the OEMs offering heavy consumer offers. So customers were waiting. Now the offers are also very high, and there is no reason for the consumers to wait," he said.
Talking about industry trends, Agarwal highlighted a shift in demand as most customers were opting for SUVs across categories, like micro, compact and premium, over hatchbacks and sedans. The ticket size has also increased in the last two years, he said.
“The ticket size used to be around Rs 6 to Rs 6.5 lakh, now it is around Rs 8.5 to Rs 9.5 lakh. Majority of cars we sell today are SUVs, whether it's a compact SUV, micro SUV, or premium SUV segment. The sedan and the hatchbacks have taken a back seat,” Agarawal said.
Watch The Full Interview Here
Edited Excerpts From The Interview:
Ajay, according to data available till the end of Pitru Paksha, the numbers look very, very wobbly for four-wheelers. How is the Dussehra period beginning for car sales?
Ajay Agarawal: Pitru Paksha was a little stressful for our dealers. We had our all time inventory with us, but once the Navratras began on the third of October, things were pretty good.
The walk-ins improved decently. We have around two times walk-ins compared to the same period last month. The bookings have improved. We have a healthy pipeline of bookings. Compared to last year also, we have around 8–10% growth in bookings and as of now, the deliveries have been good.
In Delhi, NCR, where I operate, we are already close to the Vahan numbers of last month. So, I'm very hopeful that by the end of Dhanteras, when we exit this month, we will direct our stock customer pipeline to be very, very decent.
On top of it, the best thing that is helping us do the volumes is the great offers by all the OEMs. The prices and the offers on these cars are at all-time best. In the last one year, if you see the models that we sell, the transaction price is one of the best that we can offer to our customers.
Do you feel like a lot of the push or the sale numbers that you've been able to record in anticipation of this festive season is on back of better pricing and better offers or is this irrespective?
Ajay Agarawal: That is true. Yes, the current schemes offered by all the OEMs is helping drive the sales, but in the last two months, the sales were, you know, drastically low.
Last month, the passenger vehicle sales were almost 18–20% down compared to previous months. So, you know, one, there was a pent-up demand. The customer was waiting. Since there was so much news in the market about high inventory levels and OEMs offering consumer offers, you know, very, very heavy consumer offers. So customers were waiting also. Now, since you know, the offers are also very high, there's no reason for the consumers to wait. They are going ahead and making the purchases.
Are you seeing any premiumisation switch, in terms of trends and preferences?
Ajay Agarawal: Yes, it has changed. The ticket size has improved. In the last two years, if you see, the ticket size used to be around Rs 6.5 lakh. Now, the ticket size is around Rs 8.5–9.
So one, the ticket size has improved. Two, the majority of the cars that we sell today are SUVs—whether it's a compact SUV, micro SUV, premium SUV, C-segment SUV. The sedan and the hatchbacks are definitely going backside, but the major growth is coming from the SUVs and primarily the new launches also.
Will October be an unnaturally strong month, or will it be seasonal in nature and could it dip post Diwali?
Ajay Agarawal: Normally, what we have seen is primarily, again in north India, whatever we do in these nine days or 10 days of Dussehra and Navratri, we do almost 2–2.5 times by Dhanteras. So, if you see, the month will be almost 1.7–2 times of the normal months. Like, for example, I call July, August, September, average. So this month will be 1.72 times of the normal months. So October should be very, very good for all the auto dealers.
What are the inventory levels looking like, because that seems to be a concern across the industry and for dealers as well? Are you seeing a pile-up of inventory levels?
Ajay Agarawal: See, inventory levels are definitely high. But most of the OEMs have come back to the dealers and given rational targets for October, whereas the liquidation will be much higher compared to the offtake that we plan for this month. So I see a ballpark of 20–25% correction in the inventory levels.
