 |
|
The Indian automotive industry is facing a challenging period as domestic car wholesales declined in August due to a confluence of factors, primarily low demand and a surplus of unsold vehicles at dealerships. According to the Federation of Automobile Dealers Associations (FADA), its members are holding an inventory of approximately 730,000 units, enough to cover more than two months of sales. The Society of Indian Automobile Manufacturers (SIAM), while acknowledging a stock buildup, estimates the figure at 400,000 units.
The decline in wholesales, representing vehicles shipped from manufacturers to dealerships, reflects a broader trend of slowing consumer demand for automobiles in India. This trend is particularly concerning considering the upcoming festive season, a period traditionally marked by a surge in car sales. While the festival season is expected to boost demand, manufacturers are cautiously managing their production and distribution to prevent further strain on already burdened dealerships.
Maruti Suzuki India (MSIL), the country's largest car manufacturer, experienced a significant 8.4 percent year-on-year drop in wholesales to 143,075 units in August. In response to the situation, MSIL reduced its dispatches to dealers by 13,000 units. The company's dealers, who previously held stock sufficient for 38 days of sales at the start of August, have reduced their inventory to cover 36 days of sales. While this represents a decrease, MSIL's executive officer for marketing and sales, Partho Banerjee, acknowledged that further stock reduction might lead to lost sales during the crucial festive season, particularly as Navratri begins in early October.
Hyundai Motor India, the country's second-largest carmaker, also reported a decrease in domestic wholesales, registering an 8 percent decline year-on-year to 49,525 units. Despite the current slowdown, Hyundai's chief operating officer, Tarun Garg, expressed optimism about the upcoming festive season, citing the launch of the updated Alcazar sport utility vehicle (SUV) as a key driver for growth. SUVs continue to enjoy strong popularity among Indian car buyers, with their share in total passenger vehicle sales reaching 54.9 percent in August.
The situation highlights the delicate balancing act car manufacturers face between managing inventory, ensuring timely deliveries, and catering to consumer demand, especially during peak seasons. FADA's concerns regarding the high dealer stock levels have prompted the organization to engage with SIAM to address the issue. It remains to be seen how manufacturers will navigate this challenging period and whether they can successfully revitalize sales momentum during the upcoming festive season.
Source: Domestic car wholesales fall 2-3% in Aug amid high dealer stock, low demand