While Original Equipment Manufacturers (OEMs) have been steadily curtailing their wholesales to dealers, vehicle stockpile continues to mount further to 7,50,000 units for a stock period of 75 days, a Federation of Automobile Dealers Associations (FADA) official said. According to the auto retailers’ body, the despatches by passenger vehicle makers are still above the total vehicles registered at dealership points.
At the end of August, the inventory at auto dealerships across the country reached 7,00,000 units, which was worth Rs 73,000 crore, FADA had earlier shared. It has also claimed that the vehicle stockpile had climbed from 65 to 67 days in early July to 70-75 days in late-August. In the wake of high stock levels at their dealer channels, Passenger vehicle makers ramped down their wholesales by 2 percent to 3,50,000-3,55,000 units last month on a Year-on-Year (YoY) basis.
According to FADA President Manish Raj Singhania, while there has been some reduction in factory despatches by a few carmakers, the tentative wholesale figure is turning out to be higher than the actual retail numbers.
“There is a disparity of around 20,000 to 30,000 between wholesale and retail figures. As wholesale numbers are higher than the retail, the paid-up stock would obviously increase, Singhania, told Moneycontrol. He also said, “As the average stock level has increased from 65-67 days earlier to now 72-75 days, which is an increase of around five days.”
Singhania also noted that its dealers are currently saddled with 7,25,000 to 7,50,000 units across the country. As a result, the stocks will likely get cleared only after two and a half months.
When quizzed about the continual increase in inventory levels with dealers, Singhania said wholesale numbers are not in line with their retails.
“The current despatches (by carmakers) don’t align with the monthly retails. So, there will be an increase in the paid-up stock level for that particular dealership of that OEM. Therefore, we need to see the wholesale data declared by the OEM, and we need to see the retail data of that particular OEM on Vahan (portal). That will give us a true picture," added Singhania.
While the inventory period for all carmakers cannot be ascertained, Maruti Suzuki on September 1 revealed that its dealers are currently holding stock for 32-36 days.
Meanwhile, carmakers are counting on hefty discounts this festive season to boost demand. FADA stated that carmakers are offering discount rates in the range of 10-15 percent of the price during this month. Industry players and channel partners are confident of higher vehicle registrations from Ganesh Chaturthi (September 7) onwards due to discount offers.
“Discounts were bound to come in as now it’s a demand-driven market. Unlike last year, the waiting period of bestselling models has come down. The higher the stocks at the dealerships, the greater the discount offers introduced by OEMs. Above all, many customers advance their purchases due to high discount offers,” noted Singhania.
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