The Hindu : FADA's initiative to reduce obsolete inventories

Online edition of India's National Newspaper
Friday, Jul 25, 2003

Business

Business

FADA's initiative to reduce obsolete inventories

By Our Special Correspondent

CHENNAI JULY 24. The Federation of Automobile Dealers Associations (FADA) is working an Internet-based solution to help its members liquidate the piled up obsolete inventories.

The initiative will see it open a B2B (business to business) section in FADA web site and facilitate members to offer for sale online the excess and obsolete inventories at a discount.

"It will be a win-win situation for all dealers," said Ajit Chordia, President of FADA.

Addressing a press conference here today, he said such an exercise would help a dealer get rid of the not-so moving inventories even while facilitating the other to get them at a discounted price.

Mr. Chordia guesstimated the value of obsolete inventories lying with the dealers at around Rs. 500 crores. The excess inventory could have been caused by obsolescence of vehicle models, wrong orders and passage of time. "The capital unlocked through this web-based solution could be used for more productive purposes," he pointed out.

According to Mr. Chordia, the revenue stream of an automobile dealer (especially a car dealer) had undergone a major metamorphosis in the past few years. There was no margin in the sale of new vehicles, he said. The wind of change in the auto sector had seen that the vehicles did not report to workshops as often as it used to be in earlier years.

Allied activities such as sale of insurance and accessories, arranging of finance and workshop operations were the new revenue earning areas for dealers, he said.

Printer friendly page
Send this article to Friends by E-Mail

Business