Indian car dealers are worried about higher discounts amid falling sales (representative file image)
Hit by excess inventory and uncertain about consumer spending, Indian auto dealers are worried they will have to roll out more discounts to boost demand in the upcoming festive season, a dealers’ body representative said on Thursday.
The double whammy of higher inventory costs and higher discounts is a nightmare for car dealers as it has a direct impact on their profit margins.
“With our inventory already at record levels, buyers are expecting even deeper discounts,” said Manish Raj Singhania, president of the Federation of Automobile Dealers Associations.
The comments came after sales of unsold cars in the world’s third-largest auto market rose to a record 70-75 days in August, worth 778 billion rupees ($9.27 billion). Discounts are also at an all-time high.
Singhania expects inventory levels to come down in October, during the festive seasons of Navratri and Deepavali, when Indians typically make big purchases.
Many buyers have postponed their purchases until October, hoping to get bigger discounts, FADA noted, adding that heatwaves in the summer months and subsequent heavy rains in different parts of the country have hampered visits to showrooms and delayed purchasing decisions.
Car sales at dealerships fell 4.5 percent in August, their third drop so far this financial year that began in April.
The drop in auto purchases by retail buyers contrasts with a rebound in overall consumer spending, which hit a seven-quarter high between April and June.
Auto sales They are considered a key indicator of private consumption in the country. India’s automotive industry accounts for seven percent of the country’s GDP, according to government data.
India’s top three automakers by market share, Suzuki MarutiHyundai, Tata Motorsreported a drop in sales from distributors to customers of 8.5%, 12.9% and 2.7% respectively. They had previously also reported a drop in their sales to distributors.
(This story has been selected from a media outlet and remains unedited by Times Now)
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