Despite festive season, Rs 7.90 lakh cars lying unsold, it is worth...; here's the reason

Car sales during this Diwali season have seen a sharp drop, leaving car dealers across India with a record-high inventory. According to a report from The Economic Times, dealers now have around 80-85 days’ worth of unsold cars, translating to about 7.90 lakh vehicles collectively worth Rs 79,000 crore. This unusual buildup is partly because automakers pushed high volumes of cars to dealerships, expecting strong sales that ultimately didn’t materialize. In fact, car sales have dropped by 18.81%, as reported by the Federation of Automobile Dealers Associations (FADA).

The slowdown in sales began in May this year, and since then, inventories have been gradually increasing. Interestingly, this downturn has also impacted vehicles within the ₹10-25 lakh price range, a category that had been one of the biggest growth drivers in the car market after the pandemic.

Various factors have contributed to this slump. One significant reason is the unusual weather patterns over recent months. An extra-hot summer followed by heavy monsoon rains has caused many potential buyers to delay their car purchases. Additionally, there’s been a preference shift towards newer models like the Maruti Suzuki Fronx and the newly launched Tata Curvv. These newer models have seen comparatively better demand, standing out in a market otherwise facing sluggish sales.

The manufacturers with the most unsold inventory are Maruti Suzuki and Hyundai, followed by Nissan and Citroen. This high level of unsold stock poses a challenge for automakers and dealerships, who now face the pressing task of clearing their inventory in the coming months amid these market conditions.