Amidst the pile-up of passenger car inventories, automobile dealers are offering massive discounts, starting from ₹20,000 to ₹70,000. Dealers are also offering cashback and vehicle accessories to customers.
According to the Federation of Automobile Dealers Association (FADA), passenger vehicle inventory in June was also high, up to 55 days. The higher inventories create financial pressure on dealers.
“We are offering massive discounts to customers because of the stock pile-up. At my dealership, I am offering a discount of up to ₹50,000, depending on the vehicle model. I know dealers of particular Original Equipment Manufacturers (OEM) who are offering discounts up to ₹70,000,” said an automobile dealer who did not want to be named.
FADA is planning to hold meetings with the Society of Indian Automobile Manufactures (SIAM) to bring down the stockpile.
“With the increase in the financial tranche period, dealers do not have a lot of choices. The financial pressure is building up owing to the OEMs pumping inventories. This has resulted in the dealers offering heavy discounts. Customers have multiple options now, which makes the discount offerings competitive. The start of June was slow because of the delayed monsoon. We are hopeful that the sales will pick up soon,” said Manish Raj Singhania, President of the Federation of Automobile Dealers Association, to businessline.
In May, passenger vehicle inventories increased from 55 to 60 days as compared to earlier, up to 45 days. The passenger vehicle retail sales witnessed a 9.48 per cent month-on-month decline with a one per cent year-on-year dip in May. The overall automobile industry saw a dip of 5.29 per cent in May.
businessline had earlier reported a decline in customer footfalls due to heatwave across the automobile, fast-moving consumer goods, and retail sectors.
Further, FADA is also planning to speak to financiers of automobile dealers in a bid to find options that will help in bringing down inventories.