Re: Monthly Discounts / Schemes on Indian Cars.
Auto inventory pile-up at Rs 20k cr post Diwali
The auto industry's post-Diwali sluggishness has led to an inventory pile-up at dealerships and factories worth Rs 20,000 crore. Stocks have piled up to double the usual average of three to four weeks and a number of passenger vehicle makers, including Maruti Suzuki and General Motors India, have either gone for a production cut or for plant shutdowns so that they don't need to carry 2013 stock into the new year.
"The current inventory levels are 45-60 days, which are very high," said Ashok Khanna, senior executive vice-president and business head, vehicle loans, HDFC Bank. Calculating an average car's price of around Rs 6 lakh, the value of total stocks waiting at factories or dealerships is more than Rs 20,000 crore, said a top industry source. For example, a well-known European brand has 28,000 cars in its factory and dealerships. Dealer sources said the festival season wasn't good enough to clear out all inventory and November has been a sluggish month.
Car market leader Maruti Suzuki is going for a December plant shutdown. "Typically, Diwali is a retail peak and November is always sluggish so the inventory build-up follows that curve," said Mayank Pareek, chief operating officer — marketing and sales, Maruti Suzuki. "The December sales spurt will clear out the inventory before the new year. Like every year, we are going for a shutdown in December, which is part of our bi-yearly planned shutdowns." Maruti's current inventory level is just over six weeks, which will come down to 3-3.5 weeks by January 1, he added.
General Motors India has opted for a five-day week at its Talegaon plant. "Talegaon is running a five-day week for past two months as we adjusted our production to match demand so our inventory level is four weeks," said company spokesman P Balendran. Mahindra and Mahindra, which went in for a production shutdown in summer, is also holding on to around four weeks' inventory, though in some "sluggish models" it is "around five weeks", said Pravin Shah, chief executive-auto division, Mahindra & Mahindra. The auto major has seen its April-November passenger vehicle sales down 16.2% compared to a 35% growth last year. GM India has clocked 82,000 units so far this year compared to 92,435 units last year.
