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Business Standard
12-06-2025
- Automotive
- Business Standard
Car dealers sit on ₹52k cr stock as sales slow, inventories hit record high
Car dealerships in India are facing mounting pressure as unsold vehicle inventory has reached an all-time high of ₹51,000–₹52,000 crore in value terms. This sharp rise comes despite a year-long trend of muted retail demand, according to a report by The Economic Times. The current stock level by volume — estimated at 440,000 units or 34-38 days of inventory — is only slightly below last year's Diwali peak of 40-45 days. However, the sharp increase in vehicle prices and gradual stock build-up has pushed the total value to unprecedented levels. The Federation of Automobile Dealers Associations (FADA) has pegged the inventory even higher, estimating 52-53 days of stock at dealerships. This growing mismatch between wholesale dispatches and retail sales has raised concerns over working capital stress for dealers, many of whom are struggling with stock that remains unsold for extended periods, The Economic Times reported. Retail sales slump despite wholesale push Retail car sales in May stood at 302,214 units — a 3.14 per cent decline compared to the same month last year. The decline in monthly volumes marked the slowest growth in eight months and the lowest monthly figure so far in the current calendar year. Cars have remained in dealer yards for over 50 days on average for nearly 14 consecutive months — more than double the industry norm of 21 days, noted Vigneshwar, a dealer representative, the news report mentioned. Despite concerns raised by dealers, major carmakers such as Hyundai and Maruti Suzuki maintain that their inventory levels remain within acceptable limits. Hyundai Motor India's COO Tarun Garg said the company is maintaining a 'healthy inventory level of four weeks' across its dealership network, similar to the same period last year. High demand, controlled stock levels Partho Banerjee, head of sales and marketing at Maruti Suzuki India, echoed this view, claiming an improvement over last year. 'Our inventory levels are much better than the previous year,' he said during a monthly sales call on June 2, adding that Maruti's inventory stood at around 35 days. Some specific models continue to see strong demand, with waiting lists in place. These include Maruti's Brezza and Ertiga, and Mahindra's Thar, Thar Roxx, and Scorpio-N. Select variants of Toyota's Hyryder and Hycross are also in high demand, with waiting periods ranging from four to ten weeks, according to a note by Nomura.
Time of India
12-06-2025
- Automotive
- Time of India
Off the road, there's a ₹52,000 cr pileup while car sales hit the brakes
Car dealerships across India are staring at unsold inventory worth a record ₹51,000-52,000 crore-the highest ever in value terms-as manufacturers continue to push vehicles into the market despite subdued retail demand for over a year. While the 34-38 days of stock (440,000 units) by volume up to May is still marginally lower than the peak of the 40-45-day pileup ahead of Diwali last year, the total value has hit a high due to the increase in ticket size and a build up over time, according to industry executives. The Federation of Automobile Dealers Associations (FADA) pegs the inventory level even higher-at 52-53 days-raising concerns about rising working capital stress among dealerships and the disconnect between wholesale dispatches and retail offtake. Healthy inventory, say carmakers This translates to a marginal year-on-year growth—marking the slowest pace of growth in eight months and the lowest monthly volume recorded so far this calendar year. Retail sales lagged behind wholesale dispatches. A total of 302,214 cars were retailed in the same month, a decline of 3.14per cent over the same period last year. Underscoring the persistent slowdown in movement of stock at dealerships, cars have been stuck in yards for over 50 days for almost 14 months now, against the norm of 21 days, said Vigneshwar. Most dealers that ET spoke to cited rising inventory as a serious concern. Hyundai and Maruti executives, however, said inventory levels in their channels are healthy. Hyundai Motor India is 'maintaining a healthy inventory level of four weeks' across its dealership network in line with industry norms, said Tarun Garg, its chief operating officer, adding that this was similar to that in the same period last year. Partho Banerjee, head of sales and marketing at Maruti Suzuki India , said the numbers were an improvement over the year ago. 'Our inventory levels are much better than the previous year,' he said during a monthly sales call on June 2. 'It's to the tune of 35 days.' Some models, though, are bucking the trend and have waiting lists. These include variants of Maruti's compact SUV Brezza and people mover Ertiga, as well as Mahindra's Thar, Thar Roxx and Scorpio-N, according to Nomura. Select variants and colours of Toyota Hyryder and Hycross are also on a wait list of four to six weeks, and eight to 10 weeks, respectively. Hyundai's Garg acknowledged that the demand environment in the domestic market continues to be challenging. 'However, we remain optimistic in our strong fundamentals, which enables us to strategically pursue opportunities that can drive both growth and profitability,' he said. Garg expects the recent interest rate cuts by the central bank and income tax relief to support demand sentiment. 'We remain cautiously optimistic in the backdrop of global trade and economic uncertainties,' said Garg. He sees the recent rate reductions, which should lower car loan rates as well, spurring demand. 'Further, the CRR (cash reserve ratio) cut will reduce the inventory cost for our dealers.' Analysts said measures such as the rate cut and reduced income tax levels will start showing results only in the second half of the financial year. 'We expect factors such as lower income taxes and reduced interest rates to support demand, though the improved demand might be evident only by H2 of CY25F,' Kapil Singh of Nomura Global Markets Research said in a note. One potential risk is the impact on production from June due to China's curbs on the export of rare earth magnets, he wrote. Crucial for electric vehicles, magnets are also used in fossil fuel-based cars, as well as the broader industry. Nomura is maintaining its 5per cent year-on-year passenger vehicle industry growth forecast for FY26.
Economic Times
05-05-2025
- Automotive
- Economic Times
Car & 2-wheeler sales crawl in April, commercial vehicles stall
Live Events (You can now subscribe to our (You can now subscribe to our Economic Times WhatsApp channel New Delhi: Vehicle registrations in India grew by 3% to 2.29 million units in April as two-wheeler and passenger vehicle segments recorded modest increases while commercial vehicle registrations or retail sales of two-wheelers and passenger vehicles grew by 2.3% and 1.6% to over 1.68 million units and 349,939 units respectively. Three-wheelers and tractors fared comparatively better, posting growth of 24.5% and 7.6% to 99,766 and 60,915 units respectively, showed data collated by Federation of Automobile Dealers Associations (FADA) from the VAHAN portal of the road ministry. Retail sales of commercial vehicles though, fell by 1% to 90,558 units in April."With the tariff war paused, stock markets staged a sharp pullback-alleviating investor concerns-and customers thus leveraged Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu to complete purchases, helping April end on a positive note," said C S Vigneshwar, president, the two-wheeler segment, the demand environment remained stable despite mixed headwinds. "Dealers reported buoyant enquiry growth in rural areas post Rabi harvest, driven by strong crop yields, healthy reservoir levels and a favourable monsoon outlook. Wedding-season tailwinds (also) sustained rural offtake," said Vigneshwar, adding that demand also remained robust in urban limited new model introductions, passenger vehicle sales grew at a modest pace, backed by discounts and promotional offers. While demand remained healthy for SUVs, entry-level car buyers remained cautious. Dealers urged automakers to align production with market demand and reduce stock levels to mitigate deeper discounts and carrying costs at the month, sales of commercial vehicles continued to be under pressure amid product price increases, stagnant freight rates, and low fleet segment however saw healthy demand from school transport and staff mobility said the agricultural cycle this month is expected to conclude on a strong note, supported by healthy crop prices and robust mandi procurement."The IMD's forecast of an above-normal Southwest monsoon bodes well for rural incomes, farm-sector growth and downstream demand", he said, adding that a well-distributed rainy season is critical to containing food per Kantar's Rural Barometer and GroupM data, household spending has outpaced income growth, and inflationary pressures are tempering discretionary purchases. This is impacting sales of non-essential items, FADA said.
Time of India
05-05-2025
- Automotive
- Time of India
Car & 2-wheeler sales crawl in April, commercial vehicles stall
New Delhi: Vehicle registrations in India grew by 3% to 2.29 million units in April as two-wheeler and passenger vehicle segments recorded modest increases while commercial vehicle registrations declined. #Pahalgam Terrorist Attack Pakistan's economy has much more to lose than India's due to the ongoing tensions, warns Moody's Ratings The day Pakistan got the power to poke India FM Sitharaman meets ADB chief and Italian FM, discusses economic issues; no mention of Pakistan Registrations or retail sales of two-wheelers and passenger vehicles grew by 2.3% and 1.6% to over 1.68 million units and 349,939 units respectively. Three-wheelers and tractors fared comparatively better, posting growth of 24.5% and 7.6% to 99,766 and 60,915 units respectively, showed data collated by Federation of Automobile Dealers Associations (FADA) from the VAHAN portal of the road ministry. Retail sales of commercial vehicles though, fell by 1% to 90,558 units in April. "With the tariff war paused, stock markets staged a sharp pullback-alleviating investor concerns-and customers thus leveraged Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu to complete purchases, helping April end on a positive note," said C S Vigneshwar, president, FADA. In the two-wheeler segment, the demand environment remained stable despite mixed headwinds. "Dealers reported buoyant enquiry growth in rural areas post Rabi harvest, driven by strong crop yields, healthy reservoir levels and a favourable monsoon outlook. Wedding-season tailwinds (also) sustained rural offtake," said Vigneshwar, adding that demand also remained robust in urban areas. Despite limited new model introductions, passenger vehicle sales grew at a modest pace, backed by discounts and promotional offers. While demand remained healthy for SUVs, entry-level car buyers remained cautious. Dealers urged automakers to align production with market demand and reduce stock levels to mitigate deeper discounts and carrying costs at dealerships. During the month, sales of commercial vehicles continued to be under pressure amid product price increases, stagnant freight rates, and low fleet utilisation. The segment however saw healthy demand from school transport and staff mobility customers. Vigneshwar said the agricultural cycle this month is expected to conclude on a strong note, supported by healthy crop prices and robust mandi procurement. "The IMD's forecast of an above-normal Southwest monsoon bodes well for rural incomes, farm-sector growth and downstream demand", he said, adding that a well-distributed rainy season is critical to containing food inflation. As per Kantar's Rural Barometer and GroupM data, household spending has outpaced income growth, and inflationary pressures are tempering discretionary purchases. This is impacting sales of non-essential items, FADA said.
New Indian Express
05-05-2025
- Automotive
- New Indian Express
Retail auto sales start FY26 on a positive note, grow 3% in April
NEW DELHI: On the back of festive purchases around Akshay Tritiya and rural demand post-harvest, India's total automobile retail sales rose 2.95% year-on-year in April 2025, reaching 22.87 lakh units, according to the Federation of Automobile Dealers Associations (FADA). Growth was seen in all segments except commercial vehicles, which dipped 1% year-on-year. "With the tariff war paused, stock markets staged a sharp pullback—alleviating investor concerns—and customers thus leveraged Chaitra Navratri, Akshay Tritiya, Bengali New Year, Baisakhi and Vishu to complete purchases, helping April end on a positive note," said FADA President CS Vigneshwar. Two-wheeler retail volumes grew 2.25% YoY and 11.84% MoM to 16,86,774 units. Vigneshwar stated that dealers reported buoyant enquiry growth in rural areas post-Rabi harvest, driven by strong crop yields, healthy reservoir levels and a favourable monsoon outlook, while wedding-season tailwinds sustained rural offtake. Despite limited model introductions, the passenger vehicle (PV) segment registered a 1.55% YoY increase in sales to 3,49,939 units. "This performance reflects a discount-led market and elevated inventories—approximately a 50-day supply—amid cautious consumer sentiment that tempered enquiry-to-sale conversions," added Vigneshwar. Going forward in May, FADA said that this month"s agricultural cycle is concluding on a strong note, underpinned by healthy crop prices and robust mandi procurement. However, the dealer body added that Kantar's Rural Barometer and GroupM data signal heightened consumer selectivity in rural India— household spending has outpaced income growth, and inflationary pressures are tempering discretionary purchases. Here, non-essential categories such as two-wheelers is likewise plateauing amid rising living costs.
