Early festival upset bodes ill for automobile sector

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Subscribe to enjoy similar stories. Automobile dealers are staring at slowing sales and swelling stocks, after Onam and Ganesh Chaturthi that kick off India's annual festive season failed to revive a protracted slump. Concerns are mounting over whether the upcoming Navratri and Diwali festivals will spark a turnaround, amid record-high inventories, deep discounting and cooling consumer excitement.

PV stocks are currently at over 70 days, while some two-wheeler dealers have inventory for nearly three months. Several dealers have been forced to lease extra warehouse space to park surplus vehicles. With the market slowdown in September and the shraadh period considered inauspicious potentially curbing limiting sales further, hopes now rest on Navratri, starting on 3 October.

“Even with good growth, we will be left with excess inventory after the festive season," said Vinkesh Gulati, director of United Group, an auto dealership group based in Delhi, indicating the scale of the challenge. In Maharashtra, traditionally a strong market during Ganesh Chaturthi, demand was sharply below expectations. A local dealer described the situation as bleak: “Ganesh Chaturthi hasn’t gone well.

So far, we are not that excited for Navratri either," he said, pointing to subdued market activity. “The market is not picking up that much. Next month, there are a few launches like Mahindra’s Thar Roxx, which may help specific brands, but overall, I don’t think the festive season will be great this time." The dealer said sales during Ganesh Chaturthi were only 70% of last year’s figures for his outlets selling four mass-market and mass-premium PV brands.