look news india
Mumbai: After encouraging vehicle sales in the last two and a half years, stocks are currently seen rising in auto manufacturing units. According to the information received, by the end of the current month, auto companies will have a record inventory of about 4,00,000 vehicles worth Rs 45,000 crore.
Auto industry sources said election-related uncertainties, end of wedding season and high temperatures in various key markets impacted vehicle sales.
Not only are more vehicles being dispatched from manufacturing units to dealers than demand, but vehicle registrations declined by five per cent year-on-year in May. Vehicle registrations provide an indication of the state of retail sales.
Auto makers dispatched around 3.40 lakh to 3.45 lakh vehicles to dealers in the current month, which is four to five per cent higher than May last year. However, as some companies are planning to shut down units for maintenance work, production will see a decline in the coming days which will prevent further loading.
The monsoon is expected to be good in the current year and inflation is also expected to be low, which will make the conditions favourable for vehicle sales. However, given the previous highs, the sales growth percentage will be seen in single digits, with the inventory of four lakh vehicles at the end of the current month being considered the highest ever.
Sources in the Federation of Automobile Dealers Association said the current decline in vehicle sales will continue and is expected to pick up in September with the festive season. Retail sales of vehicles grew 27 per cent to 22 lakh units in April. There was an increase in demand for all types of vehicles.
