Mumbai:Inventories of two-wheelers at dealerships have piled up with the addition of 300,000 more units in April and May with most manufacturers avoiding production cuts, though consumer demand is at multi-year lows. Buyers have become scarce amid an economic slowdown — May sales dropped 8.6% compared to the corresponding period last year—pushing the industry to cut output.

The average inventory level with two-wheeler dealers at the end of May went up by 10 days from that in April to 55-60 days, according to data from the Federation of Automobile Dealers Associations (FADA), an industry body. The latter also gauges retail sales as opposed to car makers, which only measu-rewholesaledespatches to dealers.

Wholesale despatches from two wheeler manufacturers to dealers in April-May exceeded retail sales by 600,000 units, FADA president Ashish Kale told ET. Retail sales in April and May were 1.33 million and 1.41million units, respectively, as per registration data collated by FADA. This does not include Andhra Pradesh, Telangana and Madhya Pradesh. “Still, about three lakh units of inventory have been added— that is a big worry for us,” said Kale, after adjusting for sales in the three states cited above. Approximate gross value of 300,000 twowheelers is about Rs 1,500 crore.

two-wheelers

PVs take a hit:

Passenger vehicle inventory fell by about 10 days to an average of 35-40 days in May from April, with assembly lines having been slowed.

“Retail has been higher than the wholesale billing for passenger vehicles,” Kale said. “Manufacturers have taken production cuts.”

Seven of the top 10 carmakers slashed output between May and June, ET had reported on June 10.

Retail sales of passenger vehicles in April and May, little changed at about 250,000 units each, exceeded despatches by about 15,000. Retail data for the aforementioned three states is not available; this will further widen the gap between retail and wholesale numbers.

Commercial vehicle inventory levels continued to remain at around 45-50 days. Apart from the inventory with dealers, an additional 10-15 days of inventory on average is held by automakers in stockyards across the country, said sources aware of the matter.

Honda Motorcycle and Scooter India, the country’s largest scooter maker, has however managed to bring down average inventory with dealers to 30 days, half that of the two-wheeler industry.

Tata Motors too is working on cutting inventory to 21 days and is slashing production in order to achieve that, said Mayank Pareek, president of the company’s passenger vehicles business. The present inventory levels of the carmaker are, however, comparable with that of the industry, Kale said.





READ SOURCE

READ  Airlines to give views on Qatar, Singapore pacts

WHAT YOUR THOUGHTS

Please enter your comment!
Please enter your name here