Mahindra, Tata, Toyota have Started a PRICE WAR as Buyers are Done Overpaying !!

Summary

India's car dealerships are currently flooded with 7,30,000 unsold cars, valued at 73,000 crores, leading to a desperate situation where manufacturers are offering unprecedented discounts to clear inventory. With an average inventory period of 60-72 days, dealerships are struggling to sell vehicles and are urging car makers to reduce production. Discounts are soaring, with brands like Mahindra, MG, and Jeep offering discounts up to 17,00,000 rupees. This shift in market dynamics empowers customers, who are now in a position to negotiate better deals and expect significant discounts on high-end luxury cars.

Takeaways

• 🚗 India's car dealerships are currently facing a significant backlog with 7,30,000 unsold cars worth 73,000 crores.
• 📉 Car sales have seen a 2.5% decline year-on-year, with an increase in unsold inventory from 6.3 lakh cars in July to more in August.
• 📈 The Federation of Automobile Dealership Association (FADA) reports indicate a rise in the inventory period, signaling oversupply and potential discounts.
• 🏢 High inventory periods, such as the 55-60 days in 2018-19 and 100 days during COVID-19, have historically been challenging for the Indian car industry.
• 💹 Post-COVID, a surge in the stock market and real estate led to increased car demand, causing a shortage and price hikes by manufacturers.
• 📉 The average inventory period has risen to concerning levels, with some dealerships facing 100 days of unsold stock.
• 💸 The financial burden on dealerships is increasing due to longer inventory periods and high working capital finance rates.
• 🛍️ Major car manufacturers are offering substantial discounts to clear inventory, with some discounts reaching up to 17,00,000 rupees.
• 🔍 Customers are advised to shop around and negotiate for the best deals as the market dynamics have shifted in their favor.
• 🚀 The video predicts that the discounts will further increase, especially for mid-segment luxury cars, potentially offering significant savings for buyers.

Q & A

How many unsold cars are currently in India's dealership yards?

There are 7,30,000 unsold cars in India's dealership yards.

What is the combined value of the unsold cars in dealership yards?

The combined value of the unsold cars is 73,000 crores.

Why are car dealerships in India unable to sell all the cars in the next two months?

Car dealerships are unable to sell all the cars in the next two months due to the overwhelming number of unsold vehicles and possibly due to economic factors affecting consumer purchasing power.

What actions have car makers taken in response to the high inventory?

Car makers have started panicking and offering significant discounts on their cars to move the inventory.

What discounts are being offered by some car brands?

Kyoto is offering a discount of 10,00,000 rupees, MG is offering 6,00,000 rupees, and Jeep is offering 17,00,000 rupees on their cars.

How has the Indian car industry's control shifted in the recent years?

For the last three years, the control was with car makers and dealerships, but now it's shifting towards customers as discounts are being offered.

What does the inventory period metric indicate about the car industry?

The inventory period metric indicates the health of the car industry by showing the balance between supply and demand, and the need for discounts.

What was the average inventory period for car dealerships in India in Feb 2020?

In Feb 2020, the average inventory period was 100 days due to the COVID lockdowns.

Why was there a car shortage in India in Feb 2021?

There was a car shortage in Feb 2021 due to reduced production during COVID and a global chip shortage affecting car manufacturing.

What is the current average inventory period for car dealerships in India?

As of the information provided, the average inventory period is between 62-67 days, indicating an oversupply of cars.

How are car dealerships financially impacted by the high inventory?

Car dealerships are financially impacted by having to pay interest on working capital for the unsold cars parked in their yards, which reduces their profit margins.

What advice is given to potential car buyers in the current market situation?

Potential car buyers are advised to wait and shop around for the best discounts, as the market is currently favoring buyers with high discounts being offered.