A red light and green arrow are displayed on a light-emitting diode (LED) traffic signal. (Photographer: Akio Kon/Bloomberg)

Auto Inventory Piles Up In January Despite New Launches And Discounts

Inventory piled up for automakers in January as new launches and discounts failed to boost sales, according to dealers.

Passenger vehicle inventory jumped nearly 34 percent over December, according to the Federation of Automobile Dealers Associations. Inventory for two-wheelers and three-wheelers also rose 4.25 percent and 11.86 percent, respectively.

Inventory In January:

  • Passenger vehicles: 30-35 days
  • Two-wheelers: 50-60 days
  • Commercial vehicles: 30-35 days

Also read: Muted Demand To Weigh On January Auto Sales

Slowdown for automakers continued into the new year after a poor festival season as higher fuel prices and increased upfront insurance costs hurt demand. Even year-end discounts didn’t help. Automakers were hopeful of a revival in January.

Though all sectors have shown signs of positive growth on a monthly basis, demand for two-wheelers is yet to revive from its December fall, according to Ashish Harsharaj Kale, president at the association. Commercial vehicle growth was flat month-on-month but dropped from the high of last year, he said in a statement.

The two-wheeler makers will take stock of the situation and reduce wholesale billing, the association said.

Also read: BloombergQuint Survey: Tepid Demand To Hurt Auto Sales In January Despite Discounts

Other Highlights:

  • Consumer sentiment improving slowly and converting into sales.
  • New launches got back consumer attention and excitement.
  • Hopeful of uptick in retail vehicle sales.
  • Budget and tax-related sops should bring in positive sentiments.
  • Inventory of two-wheeler dealers continues to be very high.

Also read: January Auto Sales: Bajaj Auto Sales Rise 15%; Hero MotoCorp Down 9%

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