New Delhi: Thanks to an extended festive demand and the scare of high prices in the new year, monthly vehicle registrations posted a positive growth for the first time in the current financial year.
Releasing the nationwide data on Monday, the Federation of Automobile Dealers Association (FADA) said that compared to 16.61 lakh vehicles sold in December 2019, 18.44 lakh vehicles sold in the last month.
“December registrations for the first time in FY20-21 witnesses’ positive growth of 11% (Year-on-Year) largely due to festival spillover demand and pre-buying due to announcement of price hike in January 21,” the automobile dealers’ body said in a statement.
As per the data collected from 1,270 out of the 1,477 regional transport offices (RTOs), passenger vehicles sales stood at 2,18,775 units in December 2019. This is nearly 24 per cent over a year ago period.
Most importantly, tractor registrations grew the most (35.49 per cent) among all the categories on the back of good crop season.
“Tractor continues to outshine supply for 6 straight months further confirming the fact that Bharat carries on to lead India’s economic recovery,” said FADA President Vinkesh Gulati in the statement.
Similarly, two-wheeler sales increased 11.88 per cent to 14.24 lakhs last month in comparison to 12.73 lakh units sold in December 2019.
However, commercial vehicle sales slipped 13.52 per cent to 51,454 units in December 2020, as against 59,497 units a year ago.
Three-wheeler sales also fell 52.75 per cent to 27,715 units last month, from 58,651 units in December 2019.
Waiting period as high as eight months
While the demand for automobiles is picking up after Covid-19-induced disruptions, supply side issues continue to plague the industry.
“Passenger vehicle dealers continue to face supply side issues for the 2nd straight month leading to higher waiting period as high as 8 months,” said the statement.
Industry experts believe that all-time low interest rates on vehicle loans and rising demand for owned mode of transport in view of Covid-19 fears resulting in a long wait list.
High prices may dent demand
All the major automakers, including, Maruti Suzuki, Hyundai, Mahindra and Mahindra and Kia, have already announced price hikes citing exchange-rate fluctuations and high input and material costs. As per auto dealers, this will affect the sales.
“While December saw good spillover demand continuing from festive season and pre-buying due to price hike announcement, demand for vehicles in January looks to be bleak…With recent hikes announced by all original equipment manufacturers, FADA expects a temporary blip in demand as customers will take time to absorb the same,” noted that release.
(Shravan Nune)
Read more: Indian economy expected to recover by vaccine rollout: Fitch
