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November 21, 2018

CRISIL Research Sector Round-up: Entering the slow lane

For automakers, festive season brings hardly any joy, facelifts provide little lift to sales

Dusshera and Diwali haven’t exactly sparkled for automobile makers or original equipment manufacturers (OEMs). Typically, this period – September and October/November – contribute a fifth of annual sales.


While sales increased only 1.6% in October, for September and October combined, they de-grew ~2%. Consequently, fiscal-to-date (April-October) growth is just 6%, which is a major worry for OEMs.


The waiting time for popular models has come down to just a couple of weeks, while face-lifts are outnumbering new model launches. Dealer inventory post Diwali stands at ~40 days unlike ~30-35 days in the festival seasons of the past couple of years.


Consequently, we are trimming 200 basis points (bps) from our earlier growth forecast of 9-11% for the passenger vehicles industry to 7-9%.