Car sales downturn grips Kashmir as pre-owned market gains traction

Srinagar, May 31: The automotive industry across India is facing a severe demand crunch, with manufacturers anticipating a record unsold inventory of around 400,000 vehicles valued at a staggering Rs 44,000 crore by the end of this month. This comes after three years of vigorous sales growth, according to a report in the Economic Times.
The slump in car sales has cast its shadow over the union territory of Jammu and Kashmir as well. Except for certain high-demand models like the Mahindra Scorpio N, Toyota Hyryder, and similar offerings from Hyundai that continue to see long waiting periods, car dealers in J&K have confirmed the sales downturn amid rising preference for pre-owned vehicles.

“Several car dealers are sitting on unsold inventory. We clearly see a slump in demand for cars while the trend of buying second-hand cars is picking up well,” revealed a senior manager in Srinagar. 
The situation is no different in the Jammu region, where some passenger vehicle models remain in good demand, but the personal car segment continues to witness a similar slump. Dealers attribute the slowdown to factors like the upcoming elections, but acknowledge the mounting challenges in finding buyers for new cars.
“Although we hope that this is a temporary phase, mainly due to the elections, the fact is that it is getting difficult to find buyers for new cars. Our unsold inventory is also piling up,” rued a Jammu city-based dealer.
However, not all segments are experiencing a sales downturn. Models like the Mahindra Scorpio N, Toyota Hyryder, and other such utility vehicles and premium offerings remain highly sought after, with dealers across J&K reporting brisk sales in this segment.
The declining demand for passenger vehicles is reflected in the projected 5 percent dip in registrations – an indicator of retail sales – in May compared to the same period last year. With car shipments to dealers surpassing demand, the Economic Times report quoted an industry executive stating that the domestic automotive sector is set to conclude the month with a network inventory of around 400,000 vehicles, representing the highest absolute level on record.
The sales slump in J&K mirrors the broader national trend, with buyers increasingly opting for pre-owned vehicles amid rising costs and economic uncertainties, even as demand for select premium and utility vehicle models remains robust. Industry experts attribute this shift to factors like inflation, rising interest rates, and subdued consumer sentiment.
As the automotive industry grapples with the demand crunch, manufacturers and dealers in J&K and across the country are exploring strategies to clear the mounting inventory and revive sales. Measures such as attractive financing options, discounts, and renewed marketing efforts are expected to be implemented in the coming months.