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FADA Cautions Indian Automakers Amid Record High Vehicle Inventory Ahead of Festive Season

Updated: Sep 06, 2023 03:05:44pm

FADA Cautions Indian Automakers Amid Record High Vehicle Inventory Ahead of Festive Season

New Delhi, Sept 6 (KNN) The Indian automakers must be vigilant about alarming" inventory levels for passenger vehicles in India as it hits an all-time high in August ahead of the key festive season, the Federation of Automobile Dealers Association (FADA) said on Tuesday.

The average inventory of passenger vehicles (PVs) at the end of August ranged from 58-63 days, up from 50-55 days in July and 30-35 days in August last year.


Higher inventory days indicate dealers are storing vehicles for longer before being able to sell them, FADA said.

India's festive season, which starts in late August and goes on till November-end, usually draws the most vehicle purchases. However, analysts have flagged concerns about poor rains denting demand, with the country poised to experience its lowest monsoon levels in eight years.

Rishi Vora, associate vice president at Kotak Securities said, “Festive demand is the key monitorable now. If the monsoon trend continues in September, the entry level segment in two wheelers and PVs, where inventory is higher, will be impacted. Original equipment manufacturers (OEMs) then will have to take corrective action sooner.”

Retail sales of vehicles increased by 8.6 per cent in August, with PV volumes rising 6.5 per cent, data from FADA showed.

FADA said that the lack of sufficient rainfall could "adversely affect" consumer purchasing power.

Meanwhile, sales of three-wheelers soared 66 per cent in August, surpassing July's record high, while those of two-wheelers grew just 6 per cent, hurt by poor consumer sentiment and increasing competition among key players.

Retail tractor sales rose more than 13 per cent year-over-year, but fell more than 18 per cent sequentially, according to FADA data.  (KNN Bureau)


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