The inventory pile-up at automobile dealers is getting worse. Data released on Monday by the Federation of Automobile Dealers Associations showed that they now hold 790,000 units worth roughly ₹79,000 crore. These stocks could take about 80-85 days to clear.
September offtake offered little relief, with retail car sales falling 19% to 275,681 last month. Today’s historically high level of unsold stock has strained the finances of dealers, who now want car-makers to scale back dispatches so that the vehicles they have can be rolled onto streets first.
The disappointing sales figures are despite considerable discounts on offer. This suggests subdued consumer sentiment, although the shraadh period—when purchases aren’t usually made—might have had a role to play.
October’s sales, therefore, will be crucial. With Dussehra and Diwali this month, retailers have a short span of time to clear the bulk of their inventory.
Though footfalls at showrooms have reportedly increased, it’s unclear if they will see offtake to match enthusiasm. Though fossil-fuel cars still rule, the lure of going electric may have spelt a consumer dilemma as well, with some would-be buyers caught between hybrids and plug-ins.