Total registrations last month registered a 3 percent year-on-year increase at 1,891,499 units, compared to 1,838,501 units in August last year | Photo: Shutterstock
Retail sales of passenger vehicles in India witnessed a 5 percent year-on-year decline in August due to delayed customer purchases, poor consumer sentiment and persistent heavy rains, industry body FADA said on Thursday.
Total passenger vehicle (PV) registrations last month were 309,053 units, compared to 323,720 units in August 2023.
“Even with the advent of the festive season, the market remains under significant pressure… Inventory levels have reached alarming levels, with days of stock now stretching to 70-75 days and a total inventory of 780,000 vehicles, valued at an alarming Rs 77,800 crore,” Federation of Automobile Dealers Associations (FADA) President Manish Raj Singhania said in a statement.
Instead of responding to the situation, PV original equipment manufacturers (OEMs) continue to increase shipments to distributors month on month, further exacerbating the problem, he added.
“FADA urgently appeals to all banks and NBFCs to immediately intervene and control funding to dealers with excess inventory,” Singhania said, adding that dealers should also act quickly to stop procuring additional stock to protect their financial health.
Original equipment manufacturers (OEMs) must also recalibrate their supply strategies without delay, or the industry will face a potential crisis due to this inventory overload, he said.
“If this aggressive push towards overstocking continues unchecked, the auto retail ecosystem could face serious disruption,” Singhania said.
Commercial vehicle registrations saw a 6 percent year-on-year drop in August, while retail sales of tractors also saw an 11 percent drop compared to the same period last year.
However, two-wheeler sales rose 6 per cent year-on-year to 1,338,237 units in August, compared with 1,259,140 units in the same month last year, thanks to improved stock availability and the onset of the festive season, Singhania said.
Retail sales of three-wheelers also rose 2 percent to 105,478 units last month, compared with 103,782 units in the same period last year.
Total registrations last month rose 3 percent year-on-year to 1,891,499 units, up from 1,838,501 units in August last year.
As for the near-term business outlook, FADA said it remains cautiously optimistic. While the festive season and improving rural demand present promising opportunities for growth, persistent weather uncertainties and high inventory levels may temper the overall recovery, it said.
To meet these challenges, strategic inventory management and targeted marketing initiatives will be crucial to maximizing holiday sales and mitigating the risks of adverse weather conditions, he added.
(Only the headline and image of this report may have been reworked by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
First published: September 5, 2024 | 10:31 am IS
Disclaimer:
The information contained in this post is for general information purposes only. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability or availability with respect to the website or the information, products, services, or related graphics contained on the post for any purpose.
We respect the intellectual property rights of content creators. If you are the owner of any material featured on our website and have concerns about its use, please contact us. We are committed to addressing any copyright issues promptly and will remove any material within 2 days of receiving a request from the rightful owner.