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Industry body FADA says two wheeler inventory levels are a cause for concern

Industry body FADA says two wheeler inventory levels are a cause for concern

Industry body FADA says two wheeler inventory levels are a cause for concern
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By Parikshit Luthra  Feb 7, 2019 2:59:14 PM IST (Published)

The Federation of Automobile Dealers Associations (FADA) on Thursday expressed concern about high inventory levels for two wheelers.

The Federation of Automobile Dealers Associations (FADA) on Thursday expressed concern about high inventory levels for two wheelers.

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While releasing retail sales figures for the Indian auto industry, the dealers’ body said, “FADA would like to highlight that inventory of two wheeler dealers still continues to be very high, two wheeler retail is under pressure and we hope original equipment manufacturers (OEMs) will take a realistic stock of the situation and reduce wholesale billing.”
According to the association, while two wheeler sales were up four percent, inventory levels were between 50-60 days.
Speaking to CNBC-TV18, FADA president Ashish Kale said two wheeler dealers may have to go in for heavy discounting to clear inventory in case the government does not allow existing stock to be registered post the March 31, when new safety norms come into effect.
According to the dealers’ body, commercial vehicle (CV) sales saw a rise of just 0.04 percent month-on-month (MoM) and therefore remained flat.
Members of the dealer body told CNBC-TV18 that while demand for construction and light cargo vehicles was healthy, the sales of heavy commercial vehicles remained slow as many transporters were re-calibrating their fleet after introduction of new axle load norms.
Passenger vehicles (PV) rose by 34 percent over December owing to heavy discounting and new launches. Speaking about PV sales, Kale told CNBC-TV18, “MoM there has been fantastic growth in PV segment. While market sentiment turned positive towards December end we are still cautiously optimistic.”
The dealers association has released data on the basis of vehicle registrations’ across 1,081 of 1,437 Regional Transport Offices (RTO). FADA represents 15,000 dealers and 25,000 dealerships in the country.
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