Dealers’ inventory of passenger vehicles and two-wheelers surged in August as poor monsoon seems to have hit sales ahead of the festive season, even as auto manufacturers registered record dispatches during the month.
According to data released by the Federation of Automobile Dealers Association (FADA) on Tuesday, the average inventory for passenger vehicles ranges from 58-63 days at the end of August 2023 against 50-55 days in the previous month. In August 2022, the average inventory stood at 30-35 days.
The average inventory for two-wheelers ranges from 23-25 days, data released by FADA showed.
This means dealers are storing vehicles for 58 to 63 days before being able to sell them. While the data released by the auto manufacturers present a rosy picture, the dealers data clearly indicate strain in demands.
“After a prolonged period of stagnation, rural demand is showing signs of a positive resurgence. However, this recovery remains tenuous, contingent on the performance of the final phase of the monsoon season,” FADA President Manish Raj Singhania said in a statement.
Lack of sufficient rainfall could precipitate a rise in inflation, adversely affecting consumer purchasing power and diminishing demand, he added.
Major automobile manufacturers registered robust growth in dispatches to dealers in August. The country’s largest carmaker Maruti Suzuki sales surged by 16.4% to 165,402 units in August. Domestic sales of Mahindra & Mahindra surged by 26% in August on a year-on-year basis.
Retail sales by auto dealers rose at a slower pace of 9% in August. Lower sales growth by dealers indicates piling up of inventory.
On a year-on-year basis, two-wheelers sales increased by 6%, three-wheelers by 66% and passenger vehicles 6.5%, tractors by 14% and commercial vehicles by 3% during the month under review.
Published 06 September 2023, 04:16 IST