FADA registration data reveals 11pc YOY growth in Dec 2020

The 2 wheeler, passenger vehicles (PV) and Tractor categories grew by 11.8%, 24% and 35.5% (YoY) while commercial vehicles (CV) and three wheelers (3W) continued to de-grow by -13.5% and -52.7% (YoY).

To bring further clarity in CV registrations, FADA for the first time released a split in CV category by introducing LCV, MCV and HCV wise registrations. Dealer inventory continued to fall with PV inventory ranging from 15-20 days and 2W inventory at 30-35 days. PV dealers continued to face supply side issues for the 2nd straight month leading to higher waiting period as high as 8 months.

Commenting on the December’20 performance, FADA President 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 2nd 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,” he added

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.

KEY FINDINGS FROM OUR ONLINE MEMBERS SURVEY

• SENTIMENTS

o 44% dealers rated it as Good

o 39.3% dealers rated it as Neutral

o 16% dealers rated it as Bad

• LIQUIDITY

o 45.9% dealers rated it as Good

o 38.1% dealers rated it as Neutral

o 16% dealers rated it as Bad

• EXPECTATION IN JANUARY

o 45.5% dealers rated it as Growth

o 37.4% dealers rated it as Flat

o 17.1% dealers rated it as De-growth

• INVENTORY

o Average inventory for Passenger Vehicles ranges from 15 – 20 days

o Average inventory for Two-Wheeler ranges from 30 – 35 daysChart showing Vehicle Registration Data for December’20 with YoY comparison can be found below:

All India Vehicle Registration Data for December’20