- After showing a one-time YoY growth in December, January registrations once again fell by -9.66%.
- All categories except Tractor were in red. On a YoY basis, 2W, 3W, CV and PV fell by -8.78%, -51.31%, -25% and -4.46%. Tractor continued its upbeat momentum with a YoY growth of 11.14%.
- Non-availability of vehicles due to scarcity of semiconductors, a fading pent-up demand and recent price hikes coupled with no festivities and auspicious days landed January registrations in negative zone.
- While Dealer inventory for PV continued to fall and came down in range of 10-15 days, 2W inventory stayed put at 30-35 days.
- Union Government’s announcement of scrappage policy (though voluntary) is in right direction. The spend on infrastructure projects like roads and public transport will help build traction for commercial vehicles over a longer period of time.
The Federation of Automobile Dealers Associations (FADA) today released the Monthly Vehicle Registration Data for January’21.
January’21 Registration
Commenting on how January’21 performed, FADA President, Vinkesh Gulati said, “After witnessing
a one off growth in December, January Auto Registrations fell once again by ~10% YoY. Auto Industry
clearly misjudged the demand which returned post lockdown. Industry’s under estimation of post-
covid rebound along with chipmakers prioritizing higher-volume and more lucrative consumer
electronics market has created a vacuum for semiconductors. This has resulted in shortage in supply
for all categories of vehicles especially Passenger Vehicles even though enquiry levels and bookings
remained high. New launches and SUV’s continued to see high traction and helped in restricting the
overall PV registrations fall by a bigger margin.
The recent price hike undertaken by Auto OEMs also added to woos as Two Wheeler have become
more expensive for lower and middle income class. Commercial Vehicle registrations were also hit due
to vehicle financing still not back to normal and high BS-6 cost.”
Near Term Outlook
The first budget of this decade stressed on making India an Aatmanirbhar Bharat. Union Budget 2021
finally brought smile for Auto Industry as its age old demand of bringing Vehicle Scrappage Policy
(voluntary) saw light of the day. The final contours of the policy though awaited, will decide its
attractiveness and popularity. This including announcement to induct more buses in public transport,
increased infrastructure spending and building National Highways will play a pivotal role in reviving
Commercial Vehicles segment over a longer period of time.
Last year, the Auto Industry was transitioning from BS-4 to BS-6 during Q4 FY’21. This saw huge discounts
leading to higher sales and registrations. With a high base and continued shortage of semiconductors on
one hand and gradual opening of academic institutes and business as usual along with Covid Vaccine’s
effectiveness on the other, FADA continues to remain guarded in its optimism for Auto Registrations
during Q4 of this financial year.
