FADA asks OEMs to reduce inventory further despite "strong" festive sales

The overall sales for the automobile sector surpassed last year's festive record, rising by 11.8% to 42.88 lakh units.

Automotive dealers association FADA anticipates that the passenger vehicle inventory will "reduce further" from the October levels, but a complete picture will be available only by the end of the month. The dealers association on November 15 asked OEMs to liquidate 2024 inventory so dealers can enter 2025 with the "ideal FADA-recommended 21 days of inventory".

Moneycontrol had reported earlier that the vehicle stock levels continue to remain at 75-80 days across various outlets. “PV OEMs need to slow despatches (to dealers). Deliveries have to come down on a month-on month basis. Only then will this lead to lower inventory,” FADA
President CS Vigneshwar had told Moneycontrol.

The dealers association also said that the sales of commercial vehicles can benefit further from government's infrastructure spending.

"Looking ahead, the auto industry is yet to fully benefit from a government push in infrastructure spending, which we expect will bolster commercial vehicle sales. Additionally, tractors should perform better, supported by good rainfall and the government's increase in the Minimum Support Price (MSP) of crops, putting more money into farmers' hands," FADA said in a release.

42-Day Festive Period Retail Sales (Source: FADA)