December is a big month for PVs: Ashish Kale, President, FADA

Update on the Indian Equity Market:

On Monday, NIFTY closed -0.1% lower. Among sectoral indices NIFTY PSU Bank (-1.3%), NIFTY Realty (-0.4%), and NIFTY FMCG (-0.5%) closed lower. while NIFTY Media (+0.9%) NIFTY Auto (+0.6%) Nifty Fin Services (+0.2%) closed on a positive note. The biggest losers were Yes Bank (-3.8%), Nestle (-2.4%), Reliance (-1.8%) whereas Zeel (+3.6%), Vedanta (+2.4%), Maruti (+1.6%) ended with gains.

Excerpts from an interview of Mr. Ashish Harsharaj Kale, President of Federation of Automobile Dealers Associations (FADA) with CNBC-TV18: 

• Mr Kale said not just the companies, but even the dealers are currently at an inventory of 30-40 days.
• The availability of fuel is now clear that it is going to be available only from April 1, pan India so most of the manufacturers have planned 100 percent production shift only by end of February or first week of March. So, dealers will continue to buy BS-IV vehicles and it will give a very short window of a month to liquidate the entire inventory.
• Speaking about companies with larger inventories he said the Society of Indian Automobile Manufacturers (SIAM) would be better placed to talk about the inventory. About dealer inventory, the passenger vehicle (PV) inventory is at 30 days and both two-wheeler and commercial vehicle (CV) is at 40 days.
• The demand situation in December is good but conversions have just started.
• December is a big month for PV because of the year-end combined discounts that come in.
• For two-wheelers and CVs enquires are coming.
• Speaking about price hikes due to BS-VI transition, he says, few vehicles have already launched and the cost difference is between 10% to 13%.
• In case of CVs the price change is anticipated to be in between 12% to 14%, although none of the manufacturers have come up with a BS-VI pricing.