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Informist, Tuesday, Sep 10, 2024

 

By Darshan Nakhwa and Pallavi Singhal

 

NEW DELHI – JSW MG Motor India aims to reduce its passenger vehicle inventory with dealers by the end of the festival season to 30 days from 45–60 days at present, said Rajeev Chaba, chief executive officer emeritus of the company on the sidelines of the annual convention of the Society of Indian Automobile Manufacturers today. 

 

The Federation of Automobile Dealers Associations of India had recently pointed out that the passenger vehicle inventory with dealerships has shot up to alarming levels of 70-75 days, with a total inventory of 780,000 vehicles worth 778 bln rupees. Instead of responding to the situation, passenger vehicle original equipment manufacturers continue to increase dispatches to dealers on a month-on-month basis, further exacerbating the situation, it added. 

 

"We have also ended up with more inventory... But then, for the last two months, we have been taking a lot of action. Our dealers are pretty satisfied with our actions and our inventory is coming down. As we speak, our inventory is down to 45 days from 60 days and by the end of the festive season, it should go back to 30 days and that is our target," Chaba told Informist.

 

The passenger vehicle industry has reported a drop in retail sales over the past few months due to a high base, weather-related disruptions, and poor consumer sentiment. According to Chaba, excessive weather conditions have created havoc in certain pockets and that has impacted sales. Extreme heat conditions and floods in markets such as Gujarat, Telangana and Hyderabad have impacted demand. However, demand is expected to pick up with good monsoons and recovery in the rural economy.

 

Chaba expects the passenger vehicle industry sales to grow by 6-7% every year for the next few years. "Till 2030, we (industry) should become 6 mln plus. Within that, I think our (JSW MG Motor) growth should be more spectacular. Because we are talking about expanding our capacity from 100,000 units to 300,000 units and launching multiple products," he said. 

 

India's passenger vehicle industry grew around 8.5% on a year-on-year basis in 2023-24 (Apr-Mar) to a new record of 4.25 mln units, driven by the sports utility vehicle segment, which offset the impact of weakness in demand for small cars.

 

JSW MG Motor India plans to launch passenger vehicles in the new energy and internal combustion engine segments every three to six months, starting September. In 2024, the company will launch two products -- a new energy vehicle and an internal combustion engine vehicle, followed by a plug-in hybrid electric vehicle in 2025. The company is set to launch its third electric vehicle called Windsor EV on Wednesday. The Windsor EV is likely to be priced in between the Comet EV and the ZS EV.

 

Speaking about the sales of electric vehicles, Chaba said, "Our EV (electric vehicle) sales have been doing exceptionally well. We've already seen a growth of almost 70% on year. Also, with the launch of Windsor, we expect to beat the industry growth estimates. The industry will probably grow in the low single digit of 3-4%. But we expect our growth to be in double digits." End

 

 

Edited by Deepshikha Bhardwaj

 

 

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