Rising sales numbers not a reflection of ground reality, say auto dealers

Dealers say that with more job cuts and salary reduction, banks and NBFCs have become more cautious

Wholesale automobile sales for most companies in India may have risen significantly in August, but dealers say they are yet to see signs of recovery in retail demand.

Dealers say the significant increase in sales was also driven by a need to plug the diminishing inventory as most dealerships were transitioning from Bharat Stage (BS)-IV to BS-VI when the Covid-19 lockdown was announced.

“Auto companies are seeing through rose-tinted glasses. Obviously there is stock build-up happening. For some companies, it is overstocking, leading to an inventory pile-up. For others, it’s regularisation of stock,” said Vinkesh Gulati, president of Federation of Automobile Dealers