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Situation in automobile sector quite negative, all businesses cautious, says FADA

Updated : July 16, 2019 02:13 PM IST

The current situation in the automobile sector is quite negative, with all businesses on caution mode, said Ashish Harsharaj Kale, president of Federation Of Automobile Dealers Associations (FADA) on Tuesday, adding "liquidity on both the fronts is a problem, for the customer and for the dealer."

"CVs in June has seen a huge drop. It is close to 22 percent compared to May and about 19 percent year-on-year (YoY). For the entire quarter, April-May-June, CV has been down about 14 percent. So with this unexpected drop in sales, the inventory has gone up and it has increased to now about a level of 50-55 days. Two-wheelers continue to have a higher level of inventory right from the start of September 2018 when this downturn started,” he said in an interview with CNBC-TV18.

“Two-wheeler dealer inventory has been a concern, it continues to be a concern and we are hoping that the original equipment manufacturers (OEMs) will support us as we enter into the season. As retail picks up, they will regulate their wholesale billing also and help us get down this inventory,” Kale added.

On passenger vehicles, he said, “We had seen some improvement in demand for passenger vehicles. Demand is still a concern but the good part is that the wholesale supply dealers are being regulated. The stocking has started coming down. In some geographies, it is within the limit of 30-days, which used to be the earlier stocking norm.”
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