Indian auto dealers warned on Friday
that elevated vehicle inventories and rising financing costs
could weigh on demand after the festive season, even as retail
sales are expected to pick up in the coming weeks.
Passenger vehicle inventory remained at about 43-45 days, well above the body’s recommended 21-day level, the Federation of Automobile Dealers Associations said (FADA).
FADA said October retail sales were hit by a shift in
India’s key festive season, with passenger vehicle registrations
falling 14% from a year earlier and two-wheeler sales declining
28%, although it described the weakness as largely
timing-related.
India’s festive calendar is delayed this year, with major
festivals falling in November rather than October. The festive
seasonis a period when consumers typically step up big-ticket
purchases including vehicles.
FADA’s comments follow robust October wholesales, including a record monthly sales figures for industry leader Maruti Suzuki, though analysts said part of the growth reflected inventory build-up at dealerships ahead of the festive season.
Dealers reported healthy festive footfalls but flagged
pockets of rural stress due to deficient rainfall and a weak
summer crop. Vehicle price increases have also eroded the
benefit of last year’s goods and services tax reduction, FADA
said.
Additionally, FADA said dealers remained cautious about the
demand outlook beyond the festive season, citing higher
financing costs, supply constraints and model-availability gaps,
with about 31% reporting a moderate or material impact on
affordability from rising loan repayments.
Published on November 6, 2026
