Car Dealers Troubled by Low Demand as Inventory Builds

Automakers Offer Discounts as Inventory Surges From a Week in Jan to Up to 55 Days in Mar

- Ayaan Kartik

Car dealers are offering discounts, usually available during festivals such as Diwali, to clear inventory that has piled up from about a fortnight at the start of the year to up to 55 days in March as demand slows, industry executives and brokerages said.

"Retail sentiment in the automotive sector has evidently turned negative, marked by double-digit drop-in walk-ins and inquiries," Amit Hiranandani of PhillipCapital wrote on 30 March. "Inventory levels have risen, and discounts are approaching those seen during the Diwali season in an effort to clear stock. Additionally, the duration from inquiry to conversion has lengthened."

While the inventory levels are close to about 50-55 days seen a year earlier, sales declined 10% in February this year compared with a growth of 12% in the same month in 2024. The country's largest carmaker Maruti Suzuki India Ltd sold 1.79 million passenger vehicles in the financial year 2025, showing marginal growth compared with a 9% increase in the previous fiscal.