* Passenger Vehicles sales declined by
5.3% during April-August, 2013
* Dealer's inventories rose to 40%
* Dealers are expecting that it's difficult to
match last year's festive season demand
Society of Automobile Manufacturers (SIAM) has revealed that passenger vehicles sales have been declined by 5.3% during April to August, during the last year's same period.
As SIAM reported, passenger vehicles sales have been declined 5.3% during April-August 2013, compared with the same period last year. Within the passenger vehicles segment, sales of passenger cars, utility vehicles and vans dropped 5.80%, 3.11% and 6.24%, respectively. Which add the inventory at the dealers end to that and things begin to look much grimmer.
The slowing automobile industry seems to be deeper than the SIAM figures indicate. With comparison to previous year, inventories with dealer has increased by 40%
Federation of Automobile Dealers Associations' (FADA) Secretary, Mr. Gulshan Ahuja has said to media, “The average inventory at the dealers end is more than two months. Given that there are 2,800-3,000 passenger car dealers in the country, if one considers an average of INR 10 million worth of inventory per dealer, it means dealers are sitting on an inventory worth around INR 3,0000 million .”
The average per-dealer inventory had stood at around INR 6.0 million last year, say dealer sources. The average inventory for dealers, then, was around three-four weeks. The number is significant because when car companies sell automobiles to dealers, these reflect as 'sold' on their books.
One of Ahmedabad -based car dealer has reported that, Last year car selling was around 400 cars per month on an average but this selling an average 270 cars per month.
“Since March this year, sales are down by around 35% at the dealers' end. In good times, the inventory turnaround time is 24-30 days. A dealer always maintains a month's inventory. But, due to slow off take, the inventory level has gone up to around two months,” the dealer claims.
SIAM also has mentioned that compared with last financial year, the industry could be staring at lower sales this year. SIAM's Deputy Director-General, Sugato Sen had said in September “If we have to match last year's 2.7 million units, we need to be selling over 200,000 units each month. But in the past three months, we have sold less than that.”
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