Automotive dealers' association FADA has assured of strong sales growth in this year's festive season, and said the industry is on track for a double-digit growth in the period, including in the two-wheeler category.
Speaking to CNBC-TV18, FADA Vice President Sai Giridhar said that dealers are reporting a 3-4 fold rise in walk-ins and queries, compared to last year's festive period. "The first ten days of Navratra are contributing to 20% of overall business," said Giridhar.
The two-wheeler segment has clocked a 12% on year growth in the first ten days of this year's festive season, according to FADA.
Shares of major two-wheeler companies have seen a sharp fall on October 17 after Bajaj Auto's business commentary prompted concerns among market participants over the strength of the underlying demand. The Bajaj Auto stock saw its biggest fall since March 2020 in the session, leading the pack.
Bajaj Auto's September quarter results showed higher raw material cost, though the company has maintained margin above 20% and clocked a topline of Rs 13,000 crore, which is a first. Bajaj Auto also revised its growth outlook for domestic two-wheeler sales to a modest 5 percent, at the lower end of its earlier estimate of 5-8 percent.
Earlier on October 17, Rakesh Sharma, ED, Bajaj Auto had told CNBC-TV18 that the first half of this year's festive season had been below expectations, and the 100 cc segment in fact saw a decline, as per the Vahan data. Bajaj Auto said the industry has seen a mere 1-2% of sales growth in the first 15 days of the festive period.
Citi issued a 'sell' call on Bajaj Auto with a target price of Rs 7,800 per share, a downside of 33 percent from the last closing price of Rs 11,616.
Read More: Bajaj Auto Q2 FY25: Strong positioning helps defy challenges
However, FADA's assessment is reflects a far more optimistic outlook, with a target of 45 lakh units in this year's festive period, as compared to the sale of 38 lakh vehicles during last year's 42-day festive period. FADA's V-P said this demand in a combination of both pent up demand as well as festive buying. Unlike last year, the availability of variants is very high this season, and there is no shortage of inventory, he added.
The conversions this year are happening on the basis on schemes and offers from dealerships, noted FADA's Sai Giridhar. "This season is all about discounts and availability." Tractors are the only space where FADA said they are seeing negative growth during this period.
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