Vehicle makers resort to auto-debit wholesales, festival targets.
MUMBAI, July 11(The CONNECT)- The automobile market continues to be plagued by liquidity crisis and manufacturers’ pressure to lift stocks, apparently to bolster their data.
Statistics released by the Federation of Auto Dealers’ Associations (FADA) shows distress which is buried in the rosy picture sought to be painted.
The crisis cannot be buried under the carpet, a close watch by BizNewsConnect shows.
“As we enter July 2025, dealer sentiment appears tilted towards slowdown—flat and de-growth expectations (42.8% and 26.1%) exceed growth forecasts (31.1%). Similarly, booking-pipeline traction remains uneven—only 21% of 2W, 38% of PV and 32% of CV dealers report healthy enquiry flows,” FADA said.
- Please check these points by FADA President C S Vigneshwar: The month of June recorded a healthy 4.84% YoY growth overall. Segment-wise, every category closed in the green: 2W at 4.73%, 3W 6.68%, PV 2.45%, Trac 8.68%, CE 54.95% and CV 6.6%.
- 2W retails dipped 12.48% MoM but still notched a 4.73% gain on a YoY basis. While festival and marriage-season demand provided a boost, financing constraints and intermittent variant shortages moderated sales. Early monsoon rains and rising EV penetration also shaped buying patterns.
- Several dealers cited compulsory billing and forced stock lifts—often via auto-debit wholesales—leading to mandated high days of inventory aligned with festival-season targets. Overall, June demonstrated a resilient two-wheeler performance amid mixed market signals.
- PV retails slipped 1.49% MoM yet delivered a 2.45% YoY uplift. Heavy rains and tight market liquidity weighed on footfall and conversion, even as elevated incentive schemes and fresh bookings lent selective support. Some dealers indicated that certain PV OEMs have introduced compulsory billing procedures—such as automatic wholesale debits—to meet volume targets; inventory consequently stands at around 55 days. June thus painted a picture of modest but steadfast PV performance amid varied market cues.
- CV retails declined 2.97% MoM while achieving a robust 6.6% YoY expansion. Early-month deliveries buoyed volumes before monsoon-induced slowdowns and constrained liquidity dampened enquiries and conversions.
- Members pointed to the impact of new CV taxation and mandatory air-conditioned cabins, which have elevated ownership costs, alongside muted infrastructure demand. Overall, June reflected a resilient CV segment adeptly navigating cost pressures and a softening economy.
Against this mixed backdrop, FADA adopts a stance of cautious optimism—leveraging rural demand drivers and government capex while remaining agile to navigate monsoon-related disruptions, supply constraints and liquidity pressures.
