Increase In Unsold Stock Especially Honda Dealers Witnessing Bad Phase

  • 23rd, Feb 2019 9:00 AM
  • Resham Aswani
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The two-wheelers festive sale in the year 2018 initiated with a lot of zeal and enthusiasm but could not yield expected fruits but in this cloud of not so good period OEMs saw a silver lining of high demands again in the next year which also went futile and this abrupt trend resulted in the increased backlog to the level that brought dealers of several major brands to pursue OEMs participation.

Hero Motor Corp, one of the prime two-wheeler maker of the country granted the extension in credit period as well as receivables by around 10 days because the period for which products stays in inventory before sales have hiked to over eight weeks as a result dealers were hunting the addition in credit days.

Honda Motorcycle and Scooter India (HMSI), again one of the biggest participants in the automotive industry, does not approve any credit to its dealers. As a result, it witnessed the last of 2018 and the beginning of 2019 as bad phase.

  • The downturn of wholesale performance by 17.8% (YoY) to 7.08 lakh units
  • As per SIAM data, retail sales of two-wheelers in the country highlighted 1.18 million units in January and of wholesalers held 1.59 million units
  • The inventory levels at dealers are more than 25%

Federation of Automobile Dealers Association (FADA) alarms the inventory days of 50-60 days at some dealerships & expects OEMs to take measures to curb this startling trend and pressure on retailers and wholesalers. TVS Motor Company’s president and CEO N Radhakrishnan confirmed that the company will stick to its principle of maintaining inventory days between four and five weeks. He also admitted the retardation in retail sales.

In contrast to this, Bajaj Auto- the world's third-largest manufacturer of motorcycles and the second-largest in India has cherished its a double-digit growth with the 18% growth in December and 15% in January. The company was able to handle its inventory for 30-35 days which is far better than its competitors. Bajaj Auto is expecting the quick progress in the upcoming fiscal year & so looking forward to increasing its inventory.