The Federation of Automobile Dealers Association (FADA) of India stated in a monthly update today that vehicle registrations in December 2020, for the first time in FY20-21 witnessed positive growth of 11% (YoY) largely due to festival spill over demand and pre-buying due to announcement of price hike in January'21. FADA noted that 2 wheelers (W), Passenger Vehicles (PV) and Tractor categories grow by 11.8%, 24% and 35.5% (YoY) while Commercial Vehicles (CV) and 3W continues to degrow by -13.5% and -52.7% (YoY).
Dealer Inventory continues to fall with PV inventory ranging from 15-20 days and 2W inventory at 30-35 days. PV dealers continue to face supply side issues for the 2 nd straight month leading to higher waiting period as high as 8 months. FADA looks forward to demand spurring initiatives in the upcoming Union Budget and specific initiatives for Auto industry to continue auto sales in higher gear.
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.
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