New Delhi, January 11, 2021.

The Federation of Automobile Dealers Associations (FADA) today released the Monthly Vehicle Registration Data for the month of December’20.

December’20 Registration

Commenting on how December’20 performed, FADA President, Mr. Vinkesh Gulati said, “Automobile registrations for the first time witnessed YoY growth in this Financial Year by growing 11% in the month of December. A good crop season, better offers in 2W segment, new launches both in PV as well as 2W and a fear of price increase in the month of January kept the demand going. Supply side issues in passenger vehicles continued for the 2^nd straight month thus making waiting period as high as 8 months in select OEM vehicles.

The CV segment continues to see demand pressure even though on YoY basis the segment fell by 13.5% due to lower base. Increased intra-city goods movement continued to help SCV’s outperform M&HCV segment as Axle load norms, increased fuel & vehicle cost and higher freight rates continued to play spoilsport.

Tractor continues to outshine supply for 6 straight months further confirming the fact that Bharat carries on to lead India’s economic recovery.”

The Commercial Vehicle Segment

With an aim to continuously bring transparency in Auto Retails, FADA for the first time is releasing a further split in vehicle registration data by introducing Small, Medium and Heavy Commercial Vehicle registration details under the Commercial Vehicle category.

This will not only help in understanding Commercial Vehicle data better but will also help all the stakeholders viz., Suppliers, OEMs, Banks/NBFC and Dealers get real time demand status thus helping them in better planning.

Near Term Outlook

While December saw good spill over demand continuing from festive season and pre-buying due to price hike announcement, demand for vehicles in January looks to be bleak. PV may witness growth if demand supply mismatch is resolved. With recent hikes announced by all OEMs, FADA expects a temporary blip in demand  as customers will take time to absorb the same.

India’s new vaccination program is now in place. This will help Indians in increasing their mobility, restoring life back to normalcy and business as usual. With gradual opening up of educational institutes/colleges, organic demand for 2-wheelers should slowly start coming back.

The government’s approval for Rs. 12,000 crore infrastructure projects will see its positive effects in the CV space, though full recovery is only expected in all the segments of the industry from April’21 onwards. 

With no further price hike shocks, demand spurring budget by the Central Government, Covid vaccine’s effectiveness to fight the current and the new strain of virus with no/minimal side effects, FADA remains guarded in its optimism for Auto Sales during last quarter of this fiscal year.