FADA Warns of High Passenger Vehicle Inventory Levels, Urges Production Moderation

In its latest April 2025 retail data release, the Federation of Automobile Dealers Associations (FADA) has raised concerns about persistently high inventory levels in the passenger vehicle (PV) segment, calling for manufacturers to moderate production to maintain market health.

According to FADA President Mr. C S Vigneshwar, despite a modest 1.55% year-over-year growth in April, PV inventory levels remain elevated at approximately 50 days of stock. This situation continues to put pressure on dealerships through high carrying costs and necessitates aggressive discounting to move vehicles.

The Federation continues to advocate for a 21-day inventory norm at dealerships to enhance market responsiveness and cost efficiency. This recommendation comes as the PV segment faces "a discount-led market and elevated inventories" despite "limited model introductions" in the month.

FADA's analysis shows that while the PV segment registered a 1.55% year-over-year growth in April, it saw a marginal month-over-month decline of 0.19%. The growth was primarily supported by sustained SUV demand, while entry-level customers remained cautious.

This isn't the first time FADA has expressed concern about inventory levels. In earlier reports, the organization had flagged inventory levels reaching as high as 70-75 days, representing 7.8 lakh vehicles worth approximately ₹77,800 crore in some months.

Industry watchers note that the current situation requires "OEMs to recalibrate production and reduce stock levels to mitigate deeper discounts and carrying costs at dealerships." The Federation's consistent messaging highlights the need for better alignment between production schedules and actual market demand.

The ongoing inventory challenges come despite various festivals in April including Chaitra Navratri, Akshay Tritiya, and regional celebrations that typically boost auto sales. Dealers reportedly continue to face pressures from high stock levels despite these seasonal opportunities to clear inventory.