A Federation of Automobile Dealers Associations (FADA) official revealed that the Original Equipment Manufacturers (OEMs) have been steadily curtailing their wholesales to dealers in the meantime, vehicle stockpile continues to mount further to 7,50,000 units for a stock period of 75 days.
Dealers Inventory Swelling Despite Trimmed Wholesale Dispatches
It appears that the despatches by passenger vehicle makers are still quite above the total vehicles registered at dealership points, as informed by the auto retailers’ body.
The inventory at auto dealerships across the country reached 7,00,000 units by the end of August this year.
This was worth Rs 73,000 crore, as shared by FADA earlier.
Further claiming that the vehicle stockpile had climbed from 65 to 67 days in early July to 70-75 days in late-August.
Moving ahead, the 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.
This is due to the availability of high stock levels at their dealer channels.
Seeing A Clear Picture
Although, 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, said Manish Raj Singhania, FADA President.
Further adding, “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. 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.”
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, Singhania noted.
Singhania said wholesale numbers are not in line with their retails, while answering the question of the continual increase in inventory levels with dealers.
Adding, “The current dispatches (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.”
