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."