NEW DELHI: Despite an assurance by carmakers to cut down dispatches, top dealer association body FADA said inventory levels at passenger vehicle (PV) showrooms remain at alarming levels, with stock days now stretching to 70-75 days.
Inventory totalling 7.8 lakh vehicles, valued at an alarming Rs 77,800 crore. The Federation of Automobile Dealers Associations (FADA) on Thursday alleged rather than responding to the situation, PV makers continue to increase dispatches to dealers on a month-to-month basis, exacerbating the issue.
“FADA is raising SOS signals as PV sales fell by 3.46% MoM and 4.53% YoY in August. Even with the arrival of the festive season, the market remains under significant strain due to delayed customer purchases, poor consumer sentiment and persistent heavy rains.
Inventory levels have reached alarming levels, with stock days stretching to 70-75 days and inventory totalling 7.8 lakh vehicles, valued at an alarming Rs.77,800 crore,” said FADA President, Manish Raj Singhania.
FADA said dealers must act swiftly to stop taking on additional stock to protect their financial health. OEMs, too, must recalibrate their supply strategies without delay, or the industry faces a potential crisis from this inventory overload, it said.
At the end of July, FADA had said inventory level units had surged to 67-72 days, 730,000 units or Rs 73,000 crore worth stock. Carmakers, however, have pegged the number much lower at 400,000 units. Partho Banerjee, senior executive director, marketing & sales of Maruti Suzuki, on Sunday said their network stock, at the beginning of August was 38 days, has come down to 36 days.
PV retail sales in India fell 4.53% year-on-year in August to 309,053 units, as compared to 323,720 units in August 2023. While the two-wheeler (2W) sales at 13.38 lakh units and three-wheeler (3W) sales at 105,478 managed to post growth at 6.28% and 1.63%, respectively, tractor sales at 65,478 units dropped by 11.39% and commercial vehicles (CV) sales at 73,253 units saw a 6.05% drop.