Passenger vehicle retail sales rise 24% to 271,249 units in Dec: FADA

Automobile dealers' body FADA on Monday said passenger vehicle (PV) retail sales in December witnessed a year-on-year increase of 23.99 per cent to 2,71,249 units on the back of the pent up demand continuing from the festive season.

According to the Federation of Automobile Dealers Associations (FADA), which collected vehicle registration data from 1,270 out of the 1,477 regional transport offices (RTOs), PV sales stood at 2,18,775 units in December 2019.

Two-wheeler sales increased 11.88 per cent to 14,24,620 units last month, as compared to 12,73,318 units in December 2019.

Commercial vehicle sales, however, slipped 13.52 per cent to 51,454 units in December 2020, as against 59,497 units a year ago.

Similarly, three-wheeler sales fell 52.75 per cent to 27,715 units last month, from 58,651 units in December 2019.

Tractor sales, however, grew by 35.49 per cent to 69,105 units last month, against 51,004 units in the same month of 2019.

Total sales across categories increased 11.01 per cent to 18,44,143 units last month compared to 16,61,245 units in December 2019.

Commenting on December retail sales, FADA President Vinkesh Gulati said the automobile registrations grew for the first time during the current financial year in December.

"A good crop season, better offers in two wheeler segment, new launches both in passenger vehicle as well as in the two wheeler segment, and a fear of price increase in the month of January kept the demand going," he added.

Supply-side issues, however, continued to impact the passenger vehicle vertical for the second straight month thus stretching waiting period as high as eight months for some select models, Gulati said.

The commercial vehicle segment continues to see demand pressure as axle load norms, increased fuel and vehicle cost and higher freight rates continued to impact the vertical, he noted.

On growth outlook, Gulati said that 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.

Passenger vehicle segment may witness growth if demand supply mismatch is resolved, he added.

Gulati noted that with vaccination program for COVID-19 in the works, there were chances of return of normalcy and business as usual.

"With gradual opening up of educational institutes/colleges, organic demand for two-wheelers should slowly start coming back," he added.

Besides, government's approval of Rs 12,000 crore infrastructure projects would help the commercial vehicle segment as well, though full recovery is only expected in all the segments of the industry from April 2021, Gulati said.