• General retail sales of passenger cars in December 2020 grew by 24 percent.
• Total retail sales of two-wheeled motorcycles in December 2020 grew by 11.8 percent.
• Total retail sales of commercial vehicles decreased in December 2020 by 13.5 percent.
Happy year ending for the automakers
The Federation of Automobile Dealers Associations (FADA) released monthly vehicle registration data for December 2020, which recorded general retail sales of approximately 1,844,143 units, an increase of 11 percent compared to December 2019, and one more percent higher, compared to November 2020. A good harvest, better deals in the two-wheeler segment, new launches in both passenger and two wheels, and fear of higher prices in January led to demand. While the commercial vehicle sector continues to face demand pressures, the tractor segment continues to outpace supply for six consecutive months.
December 2020 registrations for the first time in fiscal year 20-21 recorded positive growth largely due to indirect festival demand and early purchase due to the announcement of the price increase in January 2021. While the two-wheeler, passenger, and tractor categories grew by 11.8 percent and 24 percent And 35.5 percent year on year (year over year) respectively, and CV and tricycle continued to decline by 13.5 percent. Percent and 52.7 percent (year on year), respectively. In terms of average inventory, the passenger car segment is in the 15-20 day range, while the two-wheel bike is in the 30-35 days range.
While there was good indirect demand in December 2020 that continued from the holiday season and early buying due to the price increase announcement, the demand for vehicles in January 2021 appears bleak. Passenger cars could see growth if the mismatch between supply and demand is resolved. With the recent increases announced by all OEMs, FADA expects a temporary increase in demand as customers will take time to absorb demand. Government approval of 12 billion rupees for infrastructure projects will see positive effects in the commercial vehicle space, although a full recovery is only expected in all sectors of the industry from April 2021 onwards.
With no further price increases, stimulating demand in the central government budget, and the effectiveness of a Covid-19 vaccine to combat the current and new strain of the virus with minimal side effects, FADA remains cautious in its optimism about auto sales during the fourth quarter of this year.
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