With 3.49 Lakh PVs Sold In April; Inventory Surges To 55 Days: FADA

India’s passenger vehicle (PV) market registered a modest year-on-year (YoY) growth of 1.55% in April 2025, with total retail sales reaching 3,49,939 units, up from 3,44,594 units in April 2024. According to the Federation of Automobile Dealers Associations (FADA), dealer inventory for PVs in April 2025 stood at 50–55 days, a notable increase from the 40–45 days seen in the preceding months. While some backlog pressure has eased due to improved vehicle availability, particularly in popular SUV models, the overall inventory build-up is raising red flags across the distribution chain.

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In anticipation of a strong April driven by new financial year purchases and pre-election sentiment, OEMs reportedly pushed more units into dealerships. However, the expected retail momentum did not fully materialise. While demand for SUVs remains relatively strong, sales of hatchbacks and entry-level sedans continue to weaken. OEMs with a higher proportion of slow-moving inventory in these segments are more exposed to inventory accumulation. 

Additionally, April traditionally witnesses moderate retail activity, sandwiched between fiscal year-end buying in March and delayed purchasing during the general election cycle. This led to fewer footfalls and delayed conversions. There was also slight tightening in retail auto financing, particularly in rural and semi-urban areas, has added friction to otherwise routine sales, increasing holding time at dealerships. 

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On the positive side, vehicle backlog days—defined as the number of days customers wait for delivery of their booked vehicles—have eased across several OEMs. As production stabilises and chip shortages abate, previously long waiting periods for in-demand models like Mahindra’s Scorpio-N, Maruti’s Brezza, and Hyundai’s Creta have shortened.

This improved availability has helped fulfill older bookings but has not significantly boosted new bookings, suggesting the backlog relief is more a result of supply chain normalisation than a surge in fresh demand.

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FADA has urged OEMs to calibrate dispatches with ground-level demand and adopt a more data-driven approach to inventory management. In its April release, the association emphasised the need for "cautious billing" and alignment between production planning and real-time retail performance. Some dealers have begun trimming future orders, opting for more conservative stock management. Others are seeking better incentive structures to manage floor planning and holding costs.

OEMs, on their part, are expected to adjust May production plans. A few, including Tata Motors and Honda, have hinted at reducing wholesale push and focusing on clearing existing dealer stock before introducing new models later this quarter.