This year, car sales during the festive season around Diwali have plummeted, leading dealers to face an unprecedented inventory crisis. Reports indicate that the current stockpile stands at 80-85 days, equivalent to approximately 7.90 lakh vehicles valued at ₹79,000 crore. This situation is partly a result of automakers ramping up vehicle dispatches in response to earlier low sales figures, which have decreased by 18.81%, according to data from the Federation of Automobile Dealers Associations (FADA).
The slowdown in car sales has been noticeable since May 2023, with inventories consistently increasing. Notably, this downturn is affecting even the mid-range car segment, specifically those priced between ₹10-25 lakh. This segment had previously been the cornerstone of sales growth following the pandemic, making its decline particularly concerning.
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Several factors have contributed to this trend. Extreme weather conditions, including an unusually hot summer followed by heavy monsoons, have deterred potential buyers from making purchases. Moreover, consumers seem to be waiting for newer models, such as the Maruti Suzuki Fronx and the recently launched Tata Curvv, which have not been significantly impacted by the overall drop in demand.
Leading manufacturers like Maruti Suzuki and Hyundai are currently grappling with the highest dealer inventories, followed closely by Nissan and Citroen. As the festive season wraps up, stakeholders in the automotive industry are left to ponder the underlying issues affecting consumer behavior and market dynamics.
