More than 7 lakh cars are parked with the dealers.Car companies reduced the speed of production.Companies are offering huge discounts to reduce the stock of vehicles.
New Delhi. The festive season begins in the country with Rakshabandhan. During this time, the sales of car companies start increasing and it lasts till the end of the year. However, the Federation of Automobile Dealers Association (FADA) has said that the inventory of cars with dealers in the country has reached around 7 lakhs. These are the cars that have not been sold and are standing at the dealership. FADA says that this is a matter of concern for the world’s third largest car market. Despite it being the festive season, people are buying fewer cars, due to which the inventory of dealers is increasing and they are incurring losses.
According to the latest reports, this stock is more than two months old. According to market experts, 30 days of inventory is considered normal, but in the current situation the inventory has reached about 60-70 days. In such a situation, the cost of maintaining these cars is increasing on the dealers. Seeing the increasing stock level with the dealers, some car companies have slowed down their production.
Cars worth Rs 73,000 crore are parked at dealerships
According to reports, 7 lakh cars are parked at dealerships across the country, whose total value is approximately Rs 73,000 crore. FADA says that if this situation continues for a long time, then the dealers may have to suffer huge losses. Dealers have to spend lakhs of rupees every month in the maintenance of cars parked in their stock yard. Apart from this, the loan on the cars and the rent for the space also have to be paid on time. If the demand in the market remains low, then the dealers will suffer direct loss.
FADA says that it has seen the inventory of cars increase from 65-67 days at the beginning of July 2024 to around 70-75 days as of today. Dealers currently have around 7,30,000 vehicles on hand, which is equivalent to about 2 months of sales. However, the Indian Automobile Manufacturers Association (SIAM) estimates this figure to be around 4,00,000 units of cars. Vehicle manufacturers can reduce production and increase the sales network for better inventory management.
Why did vehicle sales decline?
Auto experts are giving several reasons for the decline in vehicle sales. The sales have slowed down due to the intense heat in the country for the last few months and heavy rains in some states after that. At the same time, people are buying fewer vehicles right now in anticipation of getting good discounts in the upcoming festive season.
In July 2024, except Mahindra, Kia and Toyota, most car companies have registered a decline in sales. Maruti Suzuki’s sales in July were about 9.65% less than in July last year. At the same time, Hyundai, Tata Motors and Honda have also registered a decline. Tata Motors’ electric vehicle sales have also seen a sharp decline. Electric car sales have seen a decline of 7% year-on-year in the April-June quarter. At the same time, sales of Tata Motors, which is called the leader of the EV segment, have fallen by 21% in July.
Vehicle companies are giving huge discounts
At this time, most car companies are offering huge discounts on their vehicles. Tata Motors is offering discounts of lakhs of rupees on its Safari, Harrier and even Nexon. Hyundai is also offering discounts on its models like Venue and Exeter this month. Jeep India is offering a discount of Rs 12 lakh on its Grand Cherokee model. Now its starting price has become Rs 68.50 lakh. Earlier its price used to be Rs 80.50 lakh.
Tags: Auto News, Car Bike News
FIRST PUBLISHED : September 2, 2024, 14:48 IST