Kale praised the actions taken by automakers to cut down inventories, which had been at alarming levels for some time. “Although not at FADA recommended levels of 21 days, two-wheeler inventory has reduced from an alarming level. PV (passenger vehicle) inventory, already at reasonable levels, has reduced further,” said Kale.
Inventory levels of commercial vehicles (CV) fell the most: 23% from 87,618 units a year ago to 67,060 units. “CV inventory has also reduced although with retail continuing to be weak, where further wholesale regulation is required to reach FADA’s 21 days recommended levels. Heading into the unknown territory of BS VI transition, more needs to be done towards inventory reduction to avoid dealer losses,” Kale said.
FADA says that with continued liquidity easing, business appetite of banks, and non-banking financial companies (NBFCs) has grown and will surely aid the industry in the path to recovery as consumer sentiment strengthens in the coming days. “Both banks and NBFCs are requested to provide more support for a stronger recovery,” it said in a statement.
In the near term, the association expects the industry to be stable and consumer sentiment to turn positive though it advises its members to be on guard. “FADA continues its recommendation to its members to tread with caution, especially with regards to inventory and costs during this dynamic time of fluctuating consumer sentiment due to overall weak economic situation and BS VI transition,” Kale said.
According to an online survey of its members on their expectations for November, 48% dealers expect sales to be flat, 33% dealers, de-growth, and 19% dealers, growth.