Notwithstanding the festive season sales,passenger vehicle inventory levels have soared to an all-time high of 63-66 days with dealerships signaling capacity concerns.

Dealers have issued a red flag, urging car manufacturers to not only moderate vehicle dispatches but also to introduce more aggressive and attractive schemes promptly. “This dual approach is essential to help dealers clear their inventory before year-end, averting the potential financial repercussions associated with excess unsold stock,” the Federation of Automobiles Dealers Association (FADA) said.

“Without substantial interventions and if Diwali sales don’t rise to the occasion, the weight of unsold stock could lead to significant dealer distress, echoing FADA’s concerns for potential industry-wide repercussions. Immediate and decisive action is imperative to counter the risk of a financial squeeze as the year closes,” the association added.  

In 2022, the August inventory for passenger vehicles was 30-35 days, and for two-wheelers, it was 30-33 days; in 2021, it was 25-30 days and 20-25 days, respectively; and in 2020, it was 5-10 days and 15-20 days, respectively. 

In June, businesslinereported that with muted rural recovery, inflationary pressures, and a continued dip in the demand for the entry-level vehicle segment, Indian automobile dealers could be staring at rising inventories. FADA had then projected passenger vehicle inventories could go up to 55-60 days. The latest data has breached FADA’s own expectations raising concerns over the sustainability of many dealerships across the country.

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