Inventory Rises At Dealerships As Auto Slump Continues

Inventory levels at auto dealerships rose in June even as factory-gate shipments declined.

Demand for cars, scooters, motorcycles and trucks continued to fall as wholesales and retail volumes, based on vehicle registrations, declined on a yearly basis and month-on-month in June, according to data collated from the Society for Indian Automobile Manufacturers and the Ministry of Road Transport and Highways.

Retail sales, measured by registrations, fell sequentially to their lowest level since February.

Inventory levels of two-wheelers remain the highest, according to the wholesales-to-retail volumes ratio calculated by BloombergQuint. It showed an uptick in June after a brief dip in the May.

The ratio for the two-wheeler category had declined in December and March as dealers pared stock at the end of calendar and fiscal years. But it has largely risen since then and is higher than the average of the total industry.

Passenger vehicle inventory also rose even as shipments from automakers declined and registrations, a proxy for retail sales, also fell.

Commercial vehicle inventory also rose in June, the first time since March, as retail sales remained subdued. The three-wheeler segment also saw an uptick in inventory for the second straight month.