For the first time in the current fiscal year, automobile registrations in India in December showed positive growth, increasing by 11 percent on year-on-year basis, according to data released by Federation of Automobile Dealers (FADA) on Tuesday, January 12.
“A good crop season, better offers in the two-wheeler segment, new launches of passenger vehicles and the fear of a price increase in January kept demand going in December 2020. Supply-side issues in passenger vehicles for the second straight month continued thus making the waiting period as high as eight-months in select vehicle categories,” Vikesh Gulati, president of FADA, said in a statement.
However, pointing out that price hikes planned in the New Year might dampen growth, he said, “the month of December saw good spill-over demand from the festive season and pre-buying due to price hike announcements, but demand for vehicles in January looks to be bleak. Passenger vehicles may witness growth if the demand-supply mis-match is resolved. But with the recent price hike announcements by original equipment manufacturers, FADA expects a temporary blip in demand as customers will take time to absorb the price increase.”
In terms of inventories, in the case of passenger vehicles, FADA estimates them at equivalent to 15-20 days of production, and 30-35 days in the case of two wheelers.