Festive car sales face supply crunch

According to a report by the Economic Times, India's automotive sector is facing a significant supply crunch as the peak festive season approaches. Industry executives indicate that low inventory levels at dealerships may hinder sales growth during the critical one-month window spanning from Navratri to Diwali, a period that typically accounts for one-third of annual vehicle sales in the country.

Market leader Maruti Suzuki is reportedly managing a backlog of over 200,000 units, with current network inventory levels sufficient for only about 16 days of sales. This is a notable decline from the roughly one-month stock buffer that manufacturers typically maintain to meet the surge in consumer demand during the festive months. The top five manufacturers, which collectively hold more than 85% of the Indian market share, are struggling to replenish stocks despite sustained booking volumes.

While consumer demand remains strong, analysts suggest that the inability of automakers to build sufficient inventory could lead to missed opportunities for growth. The supply chain constraints are expected to be a primary focus for industry stakeholders as they navigate the remainder of the financial year. Companies are currently working to manage production schedules to mitigate the impact of these inventory shortages on overall festive performance.