Car dealers reportedly have 80–85 days of inventory, which is a concerning trend. Dealers representing the majority of auto manufacturers are impacted by this record-breaking figure. It appears that the large inventory has not been much reduced, not even by the holiday season.
 
Inventory piling up since May 2024
According to data, since May, dealer-level inventory has been building up. An estimated 790,000 unsold units, valued at around Rs 79,000 crore, are sitting at dealerships. The large volume of shipments to dealerships during a period of lower-than-normal sales may be one of the causes. Due to the anticipated strong demand, merchants frequently boost their inventory over the holiday season. However, according to FADA's september sales figures, auto sales had a negative growth of -18.81%. Dealerships may begin to have cash flow problems if this situation persists.
 
Low demand for Rs 10-25 lakh cars
Cars priced between Rs 10 lakh and Rs 25 lakh drove the increase in sales following the outbreak. But in recent months, the numbers have decreased. The luxury sector models that consistently record sales are the only exception. Small automobiles, which had the largest inventory, have previously experienced a similar circumstance. Over the past two years, this category has had slow development. However, automakers were able to keep things from becoming worse by cutting back on manufacturing and dealer shipments.
 
October, and november sales to the rescue?
FADA is optimistic that october and november auto sales will surpass those of prior months. Strong sales during diwali and dussehra might drastically cut down on the enormous amount of inventory at the dealerships. It is challenging to determine which automobile brand has the largest dealer inventory since precise data is unavailable. However, in terms of total volumes, maruti Suzuki might have the greatest dealer inventory because it is the biggest automaker. Brands with comparatively lower sales may have the largest dealer inventory when expressed as a proportion of monthly sales. Names like Nissan, Citroen, and Jeep are among them.
 
High inventory issues more with older models
Car purchasers are spending their money on newer vehicles, according to sales statistics. maruti Fronx, maruti Swift, Tata Curvv, hyundai Alcazar, mahindra XUV3XO, and Thar Roxx are a few examples. Since their inception, all of these have seen significant development. There are no significant inventory problems with any of these. There is a chance that many older models may be included in the high dealership inventory due to the increased demand for newer models. Slow automobile sales since May 2024 may potentially be due to extreme weather conditions. Heavy monsoon rains after a scorching summer may have caused automobile customers to put off making purchases. car sales may see good improvement in the upcoming months as the weather has improved in the majority of the country.
 

 

 


 
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Nirmala Sitaraman

SIBY JEYYA

01/11/2024 11:45 AM