Car companies in India increase inventory in December - Report

A sales spurt came in June under similar circumstances.

Despite December being a dry month, Indian car manufacturers are scaling up production in anticipation of the withdrawal of the existing excise duty stimulus of 4-6% by the new Government in 2015.

Any rollback would have a price fluctuation of up to INR 50,000 on common premium models according to industry analysts. The stimulus package announced by the previous Government ended in June, a month which showed 15% sales increase, in anticipation of the revision of the sop by the new Government, but it allowed continuing the stimulus to continue till December.

Rakesh Srivastava, Senior Vice-President, HMIL says that the company had urged its dealers to increase the inventory, anticipating a spurt in demand. Similarly, Jnaneswar Sen, Senior Vice President (Sales & Marketing), HCIL had said that the company had decided to scale up the production to meet the demand, which Honda experienced in June this year. Honda Cars India has added two new shifts at its Tapukara manufacturing plant in Rajasthan.

Also Read: Improving Indian car safety to come at a cost of INR 12,000 crore

Furthermore, many other car makers have also increased production and had also jacked up the inventories at the dealership and both the car manufacturers as well as industry pundits are on the same page when they say that at a time when the Indian auto market is rebounding, any negative revision of the existing stimulus by the new Government will spell disaster.

[Source - ETAuto.com]