Passenger vehicle inventory is expected to be normalised by the end of the financial year.

According to the Federation Of Automobile Dealers Association (FADA), the passenger vehicle inventory in December was between 55 to 60 days. Normal passenger inventory with dealer’s is between 21 to 35 days.  

“Passenger vehicle inventory has reduced gradually from 85 days to now 60 days. We are anticipating the inventory to normalise by the end of this financial year. The passenger vehicle retail sales increased at the end of December while the wholesale saw a reduction. The sales of two-wheelers were impacted in December largely due to cash flow, however, the tractor sales have happened during the year which indicates that the rural demand will come back,” said C S Vigneshwar, FADA President to businessline. 

The association further stated that it sees an increase in passenger vehicle retail sales at the start of 2025.

“For PV, upcoming new launches, wedding-season demand, and year-start promotions should drive footfall, though potential price hikes could moderate gain. Despite financing headwinds and heightened competition, many retailers believe that focused marketing strategies, robust supply chains and better alignment with customer preferences will create a foundation for sustained expansion,” FADA said in a statement. 

Earlier FADA had flagged the high inventories causing financial pressure with increased cash flow challenges. The association had urged the Reserve Bank of India to issue strict guidelines on funding to mitigate the risk automobile dealers face. The passenger vehicle inventory held by dealers had increased from 80 to 85 days with over 7.9 lakh vehicles available with dealers valued at ₹79,000 crore. 

To reduce inventory the OEMs were offering discounts on the passenger vehicle in the range of ₹50,000 to ₹5,00,000 during the festival season while automobile dealers were giving offers on accessories.