INSUBCONTINENT EXCLUSIVE:
According to FADA, the near-term outlook for automobile retail is cautiously optimistic
Photo: Bloomberg4 min read Last Updated : Oct 07 2024 | 11:15 AM IST
Passenger vehicle retail sales dropped sharply by 19 per cent in
a new product is avoided by many.
This sharp year-on-year (Y-o-Y) dip in sales exacerbated another challenge that the sector has been
facing for a while now, the inventory pileup
It soared to a historically high mark of 80-85 days for the dealers, which is equivalent to 790,000 vehicles worth Rs 79,000 crore.Click
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In the month of August, the inventory level was at 70-75 days, totalling 7.8 lakh vehicles, valued at
and Diwali fall in the same month, creating strong expectations for a surge in vehicle sales.
But the association also struck a note of
caution.
Given the critical festive season around the corner, FADA has urged original equipment manufacturers (OEMs) to take immediate
corrective measures to avoid a financial setback.
It also asked the Reserve Bank of India (RBI) to issue an advisory to banks, mandating
stricter channel funding policies based only on dealer consent and on actual collateral, to prevent dealers from facing additional financial
other categories, except three wheelers and tractors showing a sharp decline compared to the same time last fiscal
Two wheelers and commercial vehicles dipped by 9 per cent and 10.45 per cent respectively, in addition to the massive dip in passenger
saw a dip of 20 per cent in sales to 1,41,318, while that of Hyundai Motor India declined by 25 per cent, Tata Motors by 19 per cent
Among the top four players, Mahindra and Mahindra saw a marginal rise of 0.4 per cent, surpassing Tata Motors as the number three
This suggests that overall market sentiment during these festive periods has been underwhelming, with a trend leaning towards flat or
retail sales across various categories
Discounts and offers have been introduced across segments to stimulate demand, but these have yet to translate into a significant
in reservoirs and improved crop yields supporting rural demand, the festive season is expected to drive a substantial boost in 2W, PV, and
tractor sales with new launches been planned for the month
expected in October, dealers could face significant financial pressure from unsold stock piling up in their warehouses
While dealers and OEMs are betting on robust festive sales, especially in rural markets where positive cash flow and better agricultural
