Auto Inc's big data move: Vahan likely to take the wheel by January

OEMs already favour retail market share based data to forecast production and dispatches

Automotive original equipment manufacturers (OEMs) are likely to shift to a Vahan-based system for forecasting production and dealer dispatches by January next year, senior industry executives said. The move aims to line up dispatches more closely with dealer inventory, preventing channel stock from ballooning.

 

Currently, passenger vehicle (PV) dealers are holding about 600,000 vehicles as sales have slowed in anticipation of Goods and Services Tax 2.0. High inventory levels create a working capital crunch at the retailer level.

 

Speaking at the 7th Fada Auto Retail Conclave, Tarun Garg, director and chief operating officer (sales, marketing, service, and product strategy) at Hyundai Motor India, said, “With Telangana also joining in, I have been told that by January next year, all OEMs would want to shift to the Vahan-based system.”

 

Most OEMs currently base their production forecasts on wholesale dispatches to dealers. However, a major state like Telangana was not part of the Vahan portal, which tracks car registration data and real-world sales.

 

PV market leader Maruti Suzuki India has proposed that Vahan numbers be used as the benchmark.

 

Tata Motors has also indicated that focusing on Vahan data and market share can help optimise channel inventory.

 

Anil Sekhar, head of salesforce excellence for commercial vehicles at Tata Motors, said the company shifted its dealer performance measures to Vahan market share about three years ago. “Incentives to dealers are linked to Vahan market share. This is better than simply pushing vehicles to dealers, and the industry is using technology-driven tools to manage inventory more efficiently,” he said. Sekhar added that dealers now participate in forecasting based on their pipelines, which informs production management. “We have strict inventory management for commercial vehicles,” he said at the Fada Conclave.

 

Fada has long spotlighted the issue of excess channel inventory. C S Vigneshwar, Fada president, said, “Dealer viability equals industry viability. We ask OEMs for inventory discipline aligned to transit days, not excessive stocking.” He said that OEMs and dealers must operate as one team, not two camps.

 

At the end of August, PV inventory stood at around 56 days — well above the 21-day target preferred by dealers and the 30–35-day range OEMs typically maintain.

 

OEMs are also refining demand forecasting and variant-wise production planning. Nalinikanth Gollagunta, chief executive officer of Mahindra & Mahindra’s automotive division, said the company is introducing more “granularity” in forecasting, continuously accounting for dynamic market conditions. “Starting January, all our dealers provide detailed monthly requirements,” he said, adding that this allows the company to track which variants are selling and make supply decisions accordingly rather than blindly throwing something into the market.

 

Two-wheeler maker Honda Motorcycle and Scooter India (HMSI) plans its financial year five months in advance. Yogesh Mathur, director of sales and marketing at HMSI, said planning is based on firm dealer commitments. HMSI vehicles have even seen stockouts during Diwali in recent years.

 

Spare parts management is another focus. Volvo Car India, operating in the luxury segment, has developed an algorithm to optimise this. Jyoti Malhotra, managing director of Volvo Car India, explained that instead of dealers placing orders, the company generates orders for them, guaranteeing to take back any unsold parts after a year.