Demand boom: Carmakers have a problem that they aren't losing sleep over

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26 Aug, 2025 12:21

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Pune-based IT professional, Nayan Verma, has made three trips to two different Tata Motors dealerships in the past week hoping to test drive the Tata Nexon that his family has zeroed in for purchase.

But Verma returned home disappointed each time as the queue to get behind the wheels of the car was dispiritingly long on both occasions. “We chose the Nexon after evaluating four other SUVs and my son liked it very much. The only thing remaining is the physical connection with the car, which is just not happening”, said the 32-year old.

About 150 km away in Mumbai, a Maruti Suzuki dealership is sitting on the lowest-ever inventory in its history. “Demand for Wagon R and Swift have gone through the roof and buyers are reluctantly waiting 3-4 weeks for delivery. The situation now is much better than pre-Covid days”, pointed out the dealer.

Maruti Suzuki is struggling to raise production beyond the current levels, as it has been running its factories at peak capacities. In fact, the car market leader has been in this situation since October-November last year when the festivals began and almost every car in the stock was lapped up by consumers.

The sustained jump in demand comes despite fuel prices of petrol and diesel breaking new records almost every day. Decadal low auto loan rates, attractive finance options and robust demand from non-urban pockets have helped turnaround market sentiments faster-than-expected.

Shashank Srivastava, executive director, marketing and sales, Maruti Suzuki India said, “After a high festival demand, we thought that there would be a sharp fall in demand. But in fact, we have a pending order for about 215,000 vehicles currently”. He was talking to analysts.

Because Maruti Suzuki is struggling to supply more, its dispatch numbers (wholesale) to dealers are looking sombre compared to its rivals. In January, for instance, the maker of Baleno, saw 0.6 percent drop in wholesales compared to the same month last year, but the rest of the industry grew by 25 percent during the same month. Maruti sold 1,39,000 units to its dealers in January.

“Going forward, we would continue to have the situation where demand would chase supplies because now our stock levels are quite low. In fact, we started January with a very low stock both in the factory and in the network. The inventory stock at the beginning of January was around 21,000 in the network and the factory stock was about 700 vehicles”, Srivastava added.

The Nexon SUV and Altroz premium hatchback have helped keep the production lines of Tata Motors’ factories busy. Like Maruti Suzuki and others, the Mumbai-based, third largest carmaker is also struggling to meet demand as the order backlog continues to get amplified.

Shailesh Chandra, President, Passenger Vehicle Business Unit, Tata Motors said, “We just kept our share of voice high through marketing campaigns, which supported the demand generation. Therefore, we have been able to garner very strong bookings in Q3 also”.

We have a pending order for about 215,000 vehicles currently

- Shashank Srivastava

Tata Motors’ sales during January nearly doubled to 26,978 units on the back of incremental dispatches of the Altroz i-turbo, a new variant introduced in the month.

Venue, Creta and i20 are making the two Chennai-based factories of Hyundai buzzing with activity round the clock. The company's wholesales grew 24 percent in January to 52,000 units compared to the same month last year. But despite the hike in production Hyundai is still struggling to meet demand and the three models have a minimum waiting period of six weeks.

The demand surge is reflected even in the luxury segment. GLE, GLS and EQC, the three models of Mercedes-Benz, India's largest luxury carmaker, were totally sold out for January. While buyers must wait for the next allocation of the fully electric EQC (priced at Rs 1 crore) made from the company's German headquarters for India, the GLE and GLS have waiting periods of up to three months.