Passenger Vehicle Inventory At Record High, Needs Vigilant Monitoring, Says FADA

The inventory of passenger vehicles climbing to a record high of 60 days is alarming and needs vigilant monitoring by carmakers, the country's top dealer body said on Tuesday.

"It is alarming that inventory levels have exceeded a 60-day supply for the first time, even before the onset of the Navratri-Diwali festivities—a trend that necessitates vigilant monitoring by PV OEMs," Manish Raj Singhania, president of the Federation of Automobile Dealers Associations, said in a statement.

The passenger vehicle inventory ranged from 58 to 63 days at the end of August. The rise in inventory has been consistent over the past 3–4 months with improved delivery of vehicles.

Carmakers expect strong sales during the ongoing festival season, which led to record monthly dispatches to dealerships in August.

The festival season usually accounts for nearly one-fourth of passenger vehicle companies' annual sales.

In August, retail sales of passenger vehicles rose 6.5% to 3.15 lakh units, FADA's data showed.

However, a below-normal monsoon may derail the strong sales momentum in the country.

Lack of sufficient rainfall may lead to a rise in inflation, adversely affect consumer purchasing power, and diminish demand, FADA said.

"Such developments would be particularly inopportune as they would coincide with the peak of India's festive season, notably Navratri and Deepawali, traditionally periods of heightened consumer activity," it said.

August was the driest month on record in India since 1901, with a rain deficit of 33% as compared with earlier expectations of a 6–10% deficiency, according to the Indian Meteorological Department.

While the forecast for September is for a normal monsoon, the pattern may be uneven, with certain regions receiving an above-normal monsoon and others witnessing below-normal rainfall. The minimum temperature is also likely to be higher than normal in most parts of the country.

Auto Retail Sales In August (YoY)

• Passenger vehicle sales rose 6.5% to 3,15,153 units.

• Two-wheeler sales rose 6.3% to 12,54,444 units.

• Commercial vehicle sales grew 3.2% to 75,294 units.

• Tractor sales rose 13.6% to 73,849 units.

• Three-wheeler sales rose 66% to 99,907 units.