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Sunday, May 31, 2020

Car companies sitting on huge inventory, 3 lakh at last count

The total inventory of passenger vehicles currently stands at 2.6-3 lakh units, which is higher than average monthly sales the segment was clocking before the lockdown at 2.2-2.4 lakh.

Written by Shubhra Tandon | Mumbai | Published: April 20, 2020 12:05:50 am
car companies, automobile companies, Maruti, Suzuki, Honda, Hyundai, Business news, Indian Express For all the PV players, the current inventory is higher than their monthly sales during March. (Representational image)

There’s a reason why automobile firms are unsure of starting operations from April 20 despite the government allowing them to do so. The total inventory of passenger vehicles currently stands at 2.6-3 lakh units, which is higher than average monthly sales the segment was clocking before the lockdown at 2.2-2.4 lakh.

For all the PV players, the current inventory is higher than their monthly sales during March. For instance, Maruti’s inventory, including its stockyards and dealer networks, stands at around 130,000 units whereas its domestic sales in March was 78,344 units. Hyundai’s inventory stands at 35,000 against March sales of 26,300. In case of Tata Motors, the inventory is around 20,000 as against March sales of 5,714. For Mahindra and Mahindra, inventory is around 15,000, while March sales stood at 3,383 units. In the case of Honda Cars, the inventory stands at 8,000 units while March sales were at 3,697 units.

“We started the transition to BS-VI from April 2019. We stopped the production of BS-IV from January 2020. So, there is no stock of BS- IV. As regards network stock, we have close to 1,30,000 cars. We were prepared much in advance and were bringing out one model every month of BS VI-compliant cars,” a Maruti Suzuki India spokesperson said.

According to a Hyundai Motor India spokesperson, “We have stopped making BS IV cars many months ago and are making only BS VI cars. We do not have any inventory of BS IV cars in the plant at all. As for BS VI cars, we are still in the process of stocktaking.”

Industry executives, therefore, feel that if dealer network and retail showrooms are not allowed to operate, then producing vehicles would not be of any meaning. As Maruti Suzuki India chairman RC Bhargava says, “Produce for whom?” (FE)

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