The Federation of Automobile Dealers Associations (FADA) has cautioned two-wheeler manufacturers and dealers to keep a check on vehicle inventory levels and accordingly curb production as demand may remain subdued after the festive season.
The association has said that the procurement of spare parts will be affected due to the third wave of the COVID-19 pandemic in many cities which will hinder the smooth supply of vehicles in the Indian markets. It could create a mismatch in the supply and demand, thus, affecting the passenger vehicle sales.
It further warned that high inventory levels in the last few months of the year may impact dealers’ financial health, thus leading to closures and job losses.
India’s total October auto sales declined by 24pc to 1.4mn units from the prior year due to COVID-19 impact on to supply chain but increased by 5.1pc from September, according to the data provided by FADA.
The country’s two-wheeler sales in October stood at 1mn units, down by 26.82pc from 1.4 mn units in the year prior, while three-wheeler registrations fell significantly by 64.50pc to 22,381 units as compared to 63,042 units as compared to the prior year.
Passenger vehicle (PV) sales in October plummeted by 8.80pc to 249,860 units, while from 273,980 units last year, while sales of commercial vehicles decreased by 30.32pc to 44,480 units as compared the prior year.
The passenger vehicle dealers ended with a limited stock of high-selling items and odd variants in October which did not attract much demand in October.
Tractor sales, however, grew 55.53pc in October to 55,146 units from 35,456 in the prior year due to robust demand.
FADA has urged the government to come up with an incentive-based scrappage policy and to release funds for infrastructure projects which could help in creating demand and will lead to higher production of vehicles.