Automakers to help reduce inventory at dealerships

In a bid to reduce inventory stocks at dealerships across the country, original equipment manufacturers (OEMs) have reduced production and supply. 

“OEMs are looking to reduce stock by pushing fewer vehicles to dealerships, preventing potential oversupply issues in the coming months. The inventory, by industry estimate, is 30-32 days, though for some models it is higher,” Shashank Srivastava, Senior Executive Officer, Marketing and Sales, Maruti Suzuki India Ltd, told businessline. 

The vehicle inventory at dealerships in the first week of December touched 7 lakh, with sale of entry-level vehicles impacted the most, according to the Federation of Automobile Dealers Associations (FADA).

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It said passenger vehicle inventories in November were slightly reduced but remained at 61-64 days, while two-wheelers inventories stood at 32-37 days.

“We will know if the OEM has reduced vehicle stocks in the first week of January,” Manish Raj Singhania, President of FADA, told businessline. 

Flagging concerns

In October, the association had flagged concerns that inventory of passenger vehicles had touched an all-time high of 63-66 days.

Businessline had earlier reported that FADA had decided to ask financiers not to overfund automobile dealers due to the high inventory.

“Our focus has been on accelerating our vaahan sales in Q3FY24, while wholesale will be at a relatively lower level, to meet the targeted (calendar year-end) channel stock,” said Shailesh Chandra, Managing Director, Tata Motors Passenger Vehicles Ltd and Tata Passenger Electric Mobility Ltd. 

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