Sept bleak, inventory high at automakers

The festive season appears to have brought little cheer to automakers as inventory levels remain almost unchanged from the preceding month.

Worse, channel checks show that enquiries and footfalls have not been very encouraging as customers delay their purchases due to high running costs.

“Inventories are piling up. We are expecting things to get better after the Shraddha period. Sentiments are low due to factors such as delayed rains and rising interest rates. Customer walk-ins are poor despite high discounts offered by dealers and manufacturers,” said Nikunj Sanghi, president of Federation of Automobile Dealers’ Association.

According to dealers, things haven’t changed much since June this year, when inventories across manufacturers started piling up due to low demand.

“The situation is like a slowdown,” said a Mumbai-based Ford dealer.

The inventory period for petrol cars is almost 60 days compared to 3-4 weeks earlier, while for two-wheelers it is about 45-60 days. Some of the diesel cars are available off the shelf now.

Car market leader Maruti Suzuki, however, is gaining as the production is back on track after a month-long lockout at its Manesar, Haryana, factory.

“The inventory is in control and the sales of Maruti’s diesel vehicles are improving. In fact, we feel sales of other manufacturers might have got affected due to revival of Maruti’s production,” said Sanjeev Bafna of Seva Automotive, who handles Maruti dealerships in Nagpur, Nashik, Dhule and Nanded regions of Maharashtra.

The industry has been expecting a subdued festival season this year.

“Generally, there is an incremental sales of 20% during the festival season. However, this year we are not expecting more than 5% additional sales during the season,” said P Balendran, vice-president, General Motors India.

A section of the industry is hopeful of some revival during Dusshera.

“The stock market is looking better with the government announcing reforms in some of the sectors. This would bring some positivity into the buying sentiment,” said Balendran.