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Automobile demand unscathed by petrol above Rs 100, auto firms to rev up output

Launch of new models, low interest rates for car loans and growing preference for personal mobility because of the pandemic has helped demand bounce back and prompted leading companies Maruti Suzuki and Hyundai to ramp up production.

June 18, 2021 / 04:39 PM IST
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  • nselive
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Demand for vehicles has bounced back after the lockdowns despite petrol prices surging above the century mark in many cities, prompting auto companies to  step on the gas to raise production as waiting periods of some models are stretching to 4-6 months.

Hyundai Motor India, for instance, is preparing to start the third and final production shift at its plants in Chennai from June 21. “We are running two shifts presently and we will start with the third shift from Monday," the company's director for sales and arketing, Tarun Garg, said.

Maruti Suzuki, India’s largest carmaker, is hiking production at its two plants in the north while parent company Suzuki is also pushing for increased output at its plant in Gujarat. Maruti Suzuki had kept its plants shut until May 16 to divert oxygen for medical use and for the annual maintenance.

Hyundai, which is India’s second largest carmaker, saw 4,000 bookings pouring in for the Alcazar, a seven-seater SUV introduced on June 18, even before the company announced the price of the vehicle which is Rs 16.3 lakh.

While deliveries of the Alcazar start from June 18, the vehicle has a waiting period of 4-8 weeks. The Creta model has an order backlog for 4-5 months while for the Venue the waiting is for 8-10 weeks, senior Hyundai executives said.


“The rise in fuel prices is a cause of concern and not something which can be ignored. But it is also something that is not in our control. So, what we can do is improve the fuel efficiency of our vehicles and that is what we are doing,” added Garg. Price of petrol in Mumbai has crossed Rs 102 per litre.

With the relentless rise in prices of petrol and diesel, market watchers are apprehensive about vehicle demand sustainability, but with personal mobility becoming a top priority amid the pandemic coupled with auto loan rates being all-time low and launch of new models, car buyers do not seem to mind the spike in fuel prices.

“With around 80 percent of the retail market opening up post the lifting of the lockdown in this month by various states, bookings have returned to the level of June 2020. It's only the states in the south which are still under some restrictions but that should ease out in the next few weeks”, said a senior sales official of a two-wheeler maker.
Swaraj Baggonkar
first published: Jun 18, 2021 04:38 pm

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