Domestic vehicle retail sales across all categories rose for the first time in the current fiscal year in December, with registrations increasing 11% year-over-year (year-on-year) to more of 18.44 lakh, driven by double-digit growth in sales of passenger vehicles (PV) as well as two-wheelers, according to data released Monday by the Federation of Automobile Dealers Associations (FADA).

While PV retail sales rose 24% last month, two-wheeler sales increased nearly 12%, mainly due to the fallout from festive demand and the push by consumers in their decisions. purchase following the price increases announced by most manufacturers starting in January.

However, the dealership body expects demand in January to be “gloomy” for PVs due to price increases and supply side issues.

According to the data, PV sales increased 24% to over 2.71 lakh, while sales of two wheels increased nearly 12% to 14.24 lakh. Sales of commercial vehicles (CVs) continued to decline, by 13.52% to 51,454 units. The tractor segment continued to record positive sales growth with an increase of almost 36% to 69,105 units.

“First-time car registrations have grown annually in this fiscal year,” said Vinkesh Gulati, President of FADA.

Good harvest season

“A good harvest season, better offerings in the two-wheel segment, new launches and the fear of a price increase in January have helped to maintain demand,” he added.

However, PV supply issues continued for the second month in a row, pushing the wait period for some models up to eight months, he added.

On the short-term outlook, FADA said, demand for vehicles in January appeared to be “gloomy.”

“PVs can experience growth if the demand-supply mismatch is resolved. With the recent increases announced by all OEMs, FADA expects a temporary drop in demand as customers will take time to absorb the same. “

Hope for CVs

The concessionaire body added that with the gradual opening of educational institutions and colleges, demand for two-wheelers is expected to slowly start to return, while government approval for infrastructure projects in a value of ₹ 12,000 crore would have a positive effect on the CV space.

“Although a full recovery is only expected in all segments of the industry from April 2021, with no further price hike shocks, budget stimulating demand from central government, effectiveness of COVID-19 vaccine to combat against the current strain and the new strain of virus with no / minimal side effects, FADA remains cautious in its optimism for auto sales in the last quarter of this fiscal year, ”he said.

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