Festive Season Gears Up: Companies Boost Production Capacity by 20%.

festive season

Automobile and consumer electronics manufacturers are revving up their production for the upcoming festive season, with expectations of robust demand recovery. Many CEOs have revealed plans to increase production by approximately 10-20% compared to last year, and there’s optimism in the air as component shortages begin to ease.

Leading automakers like Maruti Suzuki, Hyundai, Tata, Toyota, Mahindra & Mahindra (M&M), among others, are already operating their plants at full capacity, a month earlier than their usual schedule. This proactive approach stems from their anticipation of achieving record-breaking festive season sales, thanks to the improved supply situation.

festive season

In the realm of electronics, both brands and contract manufacturers are gearing up to reach peak production capacity by early September. Inventories for electronic products such as smartphones, televisions, refrigerators, and washing machines have returned to normal levels.

This positive trend comes on the heels of increased demand in July and August, prompting companies to ramp up factory output. Onam sales in Kerala have also kicked off on a strong note, registering a 30% growth in automobile sales compared to last year.

According to Shashank Srivastava, senior executive officer for marketing and sales at Maruti Suzuki, “The festive season has begun with good growth during Onam in Kerala. With the biggest bottleneck of semiconductor shortage easing, we are working on ramping up production to reduce waiting periods for models in high demand like Brezza, Ertiga, XL6, Fronx, and Jimny.” The company currently has pending orders for 342,000 vehicles.

The festive season starts with Onam and reaches its peak during Diwali, running from the third week of August to about mid-November, followed by Christmas and New Year celebrations.

In the electronics sector, orders for televisions and washing machines are on the rise, and the outlook is highly positive for smartphones and wearables. Atul Lall, managing director of Dixon Technologies, one of India’s largest electronics contract manufacturers, anticipates “high double-digit growth in festive season orders over last year” and cites optimism among brands building up inventory.

CEOs have already projected increased demand for this year’s festive season, including for entry-level products that have faced challenges since the Covid-19 pandemic.

Passenger vehicle makers, in particular, have increased production, with a notable 18.4% rise to 393,094 units in July compared to June. Market leader Maruti Suzuki increased production by 37%, while M&M and Hyundai recorded increases of 15% and 3%, respectively.

festive season

Kamal Nandi, the head of Godrej Appliances business, reported an 18-20% growth in August sales compared to the previous year, with robust Independence Day sales. As a result, production is set to scale up to full capacity.

While most smartphone brands are being cautious due to past experiences of high festive season inventory in 2022, premium brands like Apple, Samsung, and OnePlus plan to increase production and supplies by 15-20% in anticipation of buoyant demand in this segment, according to Tarun Pathak, research director at Counterpoint.

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