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Business Standard
25 minutes ago
- Automotive
- Business Standard
Geopolitical tensions, US tariffs may hit India's auto sales, warns FADA
Retail volumes fell 9.4 per cent in June from a month ago and the average time a car stayed in a showroom, or inventory days, rose to about 55 days from 52-53 days in May Reuters Geopolitical tensions and spillover effects from US tariffs may weigh on consumer sentiment, while China's rare earth export curbs could further tighten vehicle supply and drag on retail sales, India's Federation of Automobile Dealers Associations (FADA) said on Monday. Retail volumes fell 9.4 per cent in June from a month ago and the average time a car stayed in a showroom, or inventory days, rose to about 55 days from 52-53 days in May, above the FADA's recommended threshold of 21 days. China's rare earth export curbs have upended global auto supply chains, exacerbating challenges for Indian carmakers already grappling with high inventories and tighter financing amid uncertainty over US President Donald Trump's tariffs. "As we enter July 2025, dealer sentiment appears tilted towards (a) slowdown - flat and de-growth expectations (42.8 per cent and 26.1 per cent) exceed growth forecasts (31.1 per cent). Similarly, booking-pipeline traction remains uneven," FADA said. However, above-normal monsoon showers should bolster rural demand in the near term, FADA said, adding that July will likely see mixed fortunes, driven by an agrarian tailwind, yet tempered by seasonal headwinds and elevated price points. Last month, the FADA warned that demand may remain subdued in June, citing elevated inventory levels, reduced financing and concerns about rare earth shortages. (Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Time of India
an hour ago
- Automotive
- Time of India
India's auto retail grows 4.84% in June 2025 despite monsoon, liquidity woes: FADA
The Indian auto retail sector reported a YoY growth of 4.84 per cent in June 2025, driven by resilient two-wheeler and commercial vehicle sales, despite challenges posed by early monsoon disruptions, financing constraints, and high inventory levels, the Federation of Automobile Dealers Associations (FADA) said on Monday. According to FADA, retail volumes across all segments reached 20,03,873 units in June, up from 19,11,354 units in the same month last year. However, compared to May 2025, monthly sales dipped 9.44 per cent due to seasonal slowdowns and liquidity tightening. Industry's growth across segments Two-wheeler sales rose 4.73 per cent YoY, though they dropped 12.48 per cent on a monthly basis. Passenger vehicle (PV) retails saw a modest growth of 2.45 per cent YoY, while commercial vehicle (CV) sales grew by 6.6 per cent. Tractor and construction equipment sales surged 8.68 per cent and 54.95 per cent, respectively. 'The month of June recorded a healthy 4.84 per cent YoY growth overall. While early monsoon rains and seasonal demand supported rural buying, financing bottlenecks, price hikes and variant shortages remained a concern,' said C S Vigneshwar, President, FADA. Altering inventory Inventory levels remained elevated—around 55 days for PVs—amid subdued booking pipelines. Dealers across categories reported tepid enquiries: 21 per cent for 2Ws, 38 per cent for PVs, and 32 per cent for CVs. Sentiment among retailers leaned cautious, with 43 per cent expecting flat sales and 26 per cent anticipating de-growth in July. FADA said it maintains a 'cautiously optimistic' stance for the near term, aided by strong government capex, above-normal monsoon predictions, and a revival in rural demand. However, headwinds such as rare-earth material shortages, geopolitical tensions, and rising ownership costs warrant close monitoring.
Time of India
2 days ago
- Automotive
- Time of India
Rising inventory glut creates uncertainty in India's automobile retail sector
The Indian automobile industry is staring at a worrying build-up of unsold inventory at dealerships , casting a shadow over what has otherwise been a robust post-pandemic production run. According to the Economic Times, an estimated ₹52,000 crore worth of vehicles remain unsold — a figure that points to a growing disconnect between wholesale dispatches and actual retail sales . According to the Federation of Automobile Dealers Associations (FADA) , inventory level is currently hovering at 52–53 days across several segments, significantly higher than the industry's healthy benchmark of 30–35 days. Mounting costs and margin pressures For dealers, the consequences of ballooning stock levels are becoming increasingly difficult to ignore. Higher inventory translates to a direct rise in carrying costs — including financing charges, insurance, and storage — all of which erode already thin margins. With capital locked in unsold vehicles, cash flow becomes tighter, limiting the ability of dealerships to invest in staffing, service expansion, and technology upgrades. Many dealers are also being forced to offer steep discounts to clear ageing inventory, further eating into their bottom lines. OEMs not immune to the fallout Original Equipment Manufacturers (OEMs) too face several downstream risks as excessive discounting risks diluting brand equity and resetting customer expectations for lower price points. An overburdened and financially stressed dealer network may struggle to maintain service quality and responsiveness, ultimately impacting customer experience and loyalty. In the longer term, OEMs could face market share instability if retail networks falter. Persistent misalignment between OEM sales targets and ground-level demand can lead to mistrust and churn within the dealer network. Sustainability and structural risks The current scenario poses a serious challenge for small and mid-sized dealerships. Prolonged pressure on margins and rising operational inefficiencies — including pre-delivery inspections and vehicle lot management — could push weaker players to exit or consolidate. Such trends may reduce competitiveness and diversity within the dealership ecosystem. Call for strategic rethink To stem the tide, industry experts are urging OEMs to adopt a more demand-driven approach to production and dispatch. Real-time data analytics could help better align wholesale planning with actual retail traction. Moreover, stronger dealer support mechanisms — such as inventory funding, interest subvention schemes, and buy-back programmes — are being recommended to ease the working capital burden. Bolstering digital retail platforms and diversifying dealer revenue streams through expanded offerings in used cars, after-sales services, and insurance products can help in enhancing long-term viability. Looking Ahead As the Indian auto sector continues to navigate a complex demand environment amid economic uncertainty , geopolitical tensions and shifting spending patterns, a more collaborative and transparent OEM-dealer relationship will be key. Balanced production planning and financial support will be essential to ensure that dealerships remain profitable, agile, and resilient — especially in the face of rapidly evolving consumer preferences. A robust, financially sound retail network is not just a sales channel, but a critical pillar of sustainable industry growth.
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Business Standard
3 days ago
- Automotive
- Business Standard
Mahindra BE 6, XEV 9e Pack Two EV deliveries to start by July-end
Mahindra will commence deliveries of the Pack Two variants of its BE 6 and XEV 9e electric SUVs from the end of July 2025. The updated models are now available with two battery options—59 kWh and a new 79 kWh pack—offering city driving ranges of 400 km and 500 km, respectively. The BE 6 Pack Two is priced at ₹21,90,000 for the 59 kWh variant and ₹23,50,000 for the 79 kWh version. The XEV 9e is priced at ₹24,90,000 and ₹26,50,000 for the respective variants (all prices ex-showroom). Prices do not include charger and installation costs; customers can opt for either a 7.2 kW or 11.2 kW charger at additional cost. According to Federation of Automobile Dealers Associations data, Mahindra's share in the electric passenger vehicle market rose to 21.4 per cent in May 2025 as it sold 2,632 vehicles, up from 7.4 per cent in May 2024 when it sold 594 vehicles. Mahindra's Electric Origin range, which includes the BE 6 and XEV 9e, has been recording consistent volumes. According to the company, one Mahindra electric SUV is sold every 10 minutes. The BE 6 and XEV 9e Pack Two variants include Level 2 ADAS, all-wheel disc brakes, electronic parking brake, six airbags, and a high-stiffness bodyshell. Cabin features include a 16-speaker Harman Kardon sound system with Dolby Atmos, dual-zone climate control, wireless Android Auto and Apple CarPlay, and wireless charging. The XEV 9e features a coast-to-coast triple-screen dashboard, while the BE 6 comes with a digital cockpit. Other features include adaptive cruise control, multiple drive modes, single-pedal driving, and connected car functions such as scheduled charging and cabin pre-cooling. Both models come with leatherette interiors, a fixed glass roof, 19-inch wheels, and sequential turn indicators. The BE 6 also includes sage leatherette upholstery and an ivory roof lining, previously limited to a higher pack. Mahindra's EV portfolio is supported by a service network covering over 300 locations across India.
Time of India
16-06-2025
- Automotive
- Time of India
VinFast tweaks sales plan ahead of its India debut
VinFast has recalibrated its India sales plans ahead of the launch of its electric SUVs scheduled for the upcoming festive season. The Vietnamese company has pared its sales volume target for the first year of launch by a third to 3,000 units, even as it continues to evaluate the method of CKD (completely knocked down) assembly for the V7 and V6 models. The company is also set to delay the launch of these models by a month due to an underdeveloped sales network, according to people aware of the company's plans. Production at VinFast's facility at Thoothukudi in Tamil Nadu-originally scheduled to begin on June 30-has been pushed back to July 30. Consequently, bookings for the VF7 and VF6 models will open in mid-July, with customer deliveries expected by mid-August. An email sent to the company on Tuesday seeking comment remained unanswered till the time of going to press on Sunday. "VinFast's full-fledged plans will unfold only next year when they introduce the VF 3, the company's affordable SUV. This year will mostly be about making an entry and testing the market," said one of the people cited above. The delay is being attributed to a fledgling distribution strategy and lack of network readiness. After the Bharat Mobility Show in January, VinFast appointed dealers for 40 locations. However, a majority of them have since withdrawn their letters of intent (LoIs), citing the company's inconsistent approach to distribution planning, pricing, and product positioning, the people said. As of now, only eight to ten dealers remain, they said. "There was a lot of back and forth. They do not seem to have clarity on how many sales touchpoints to have, what price point to launch the models at, and how many units to sell. We couldn't commit investment with this lack of clarity," said a dealer principal who withdrew the LoI a couple of months ago. "Since the auto show, VinFast hasn't done much on brand activation. Most are unaware of the brand in India," said another dealer who also opted out. Ashish Jain, the executive in charge of network development, seems to have resigned, said some of the people cited earlier. Jain did not respond to ET's message seeking comment and phone calls. VinFast has built a 400-acre integrated EV manufacturing facility with an annual capacity of 50,000 units in Tamil Nadu. At the Bharat Mobility Global Expo 2025, the company showcased a range of models it plans to launch in India, including the VF 3, VF 7, VF 9, and VF e34 SUVs. Electric car adoption in India continues to grow steadily. In May 2025, electric passenger vehicles accounted for 4.1% of the industry car sales, up from 3.5% in April and 2.6% in the same month last year, according to data from the Federation of Automobile Dealers Associations.
