For the first time during the financial year 20-21, the already strained Indian auto industry has experienced a north-facing curve in registration numbers. The number of registrations indicates the number of cars purchased by customers and, therefore, shows the mood of the consumers in contrast to the numbers released by companies that dispatch announce at the close of every month.
As per the Apex dealer organization Federation of Automobile Dealers Associations (FADA), December’s registrations saw an 11 % increase year-on-year because of the festival spillover demand and pre-purchases due to the announcement of price hikes in January 2021, compared to the last month ‘sss 19.29 percent year-on-year annual decline.
Private vehicles and tractor categories expanded by 11.8 percent, respectively. The percentages were 24 percent, 24% and 35.5 percent year over year, respectively.
Commenting on the positive trends, FADA president Vikram Gulati declared, “A good crop season, better offers in the 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 second straight month thus making the waiting period as high as 8 months in select OEM vehicles.”
However, consumers and the three-wheeler segment did not take the overall registration number in the form of a drop of 13.5 percent and 52.7 percent in the respective. Gulati says that the increase in transport of goods within cities helped small commercial vehicles (SCV) outperform the medium as well as the heavy-consumer vehicle (M&HCV) segment, as axle load norms, higher costs for fuel and cars, and the higher freight costs continued to be a factor in spoilsport.
Tractors, which have been working to revive the spirit of the industry since the sixth month, are still playing an important role in the revival of the sector.
Although the overall figures appear to offer a ray of optimism for the industry during the post-lockdown phase, FADA has notified that the market for vehicles in January seems to be dim. It also noted that private cars could see growth if demand-supply imbalances are resolved. It also pointed out that, with the recent increases by all OEMs, there could be a short-term dip in demand as consumers have to adjust to the same.
The body stated that with education institutions returning to the scene of vaccination, there will be a natural demand for 2-wheelers. The approval by the government for INR 12,000 crore for infrastructure development will have a positive impact on CVs.