Waiting period of two years for an SUV? Customer patience may be on thin ice
Recent years have been enormously challenging for the automotive industry at large and the Indian automotive sector in particular. Switch to BS 6 emission norms, Covid-induced lockdown, rising prices, shortage of semiconductor chip, inflationary pressures - all have created numerous hurdles at a time when demand remains reasonably robust in most major markets of the world. And while lockdown may appear to be a thing of the past now and the worst from the semiconductor shortage seems to be having a gradually minimizing effect, it may not be easy to go into a showroom and drive out with a brand new car.
The demand-supply mismatch is a very real problem and here in India, it continues to have the potential of pulling sentiments down. Traditionally, the period from August till Diwali sees brisk business in the automotive market but with waiting periods for nearly all models stretching from a few months to as high as two years, potential buyers could be in for a frustrating wait. The supply (situation) has been improved, but still the demand supply gap is huge," Vinkesh Gulati told HT Auto. “The waiting period has definitely impacted customers as they have to compromise in some or the other aspect for their dream vehicle such as colour, variant, models."
Gulati also pointed to the upcoming festivities. “For every family, car purchasing is an important family decision. They wait for this auspicious time and days to mark their buying. If we are not able to bring down the waiting period, it will be a lost opportunity for the automobile industry," he outlined.
Patience is a virtue. But only for a few
When Ajit Kumar Mishra walked into a prominent south Delhi car dealership, he knew that the waiting period for the model of his choice would be high. “It is just that I didn't expect to be told I'll get the delivery at some point late 2023," says the 45-year-old MNC executive. “The sales executive was courteous but cautioned that the demand for the SUV model is just so high, a delivery this year was out of question. You know, no car is worth that long a wait."
Mishra eventually went for the second option on his list, a model that also has a waiting period of three months for the variant he chose.
Mohit Mangal, a 35-year-old Chartered Accountant, also opted for a model with a comparatively lesser wait period. “The first dealership I went to indirectly asked me to pay an extra ₹50,000 and assured my unit would be brought up the list. I was anyway paying ₹20 lakh and this additional amount was not such a big deal for me but for the fact that it is unethical," he says, adding that he eventually chose a car from a Korean brand which was delivered after two months.
For those looking at adding cars to their respective garage, the urgency is comparatively less than for first-time car buyers and those who continue to look for personal mobility options in current times of Covid. And typically, OEMs almost always brag about getting record number of bookings but none reveal the number of cancellations, a key indicator of the persisting popularity of a model or models.
Of promises and practices
Most OEMs claim to have augmented manufacturing capabilities in order to bring down waiting periods. Most of these OEMs, however, have also pointed to how the semiconductor shortage the world over is beyond their control and rarely want to fathom a guess on when the situation is likely to improve.
But while promises of speedier delivery timelines are intact, the path ahead could be a mixed bag. On the one hand, automotive experts believe a slew of new launches is likely to hold the industry in good stead. But several financial experts also warn that with the risk of inflationary pressures and high waiting periods for newer models, are likely to offset the potential grounds that can be gained in the upcoming months.