Economy

Auto retail sales skid in January; tractors buck trend

Our Bureau New Delhi | Updated on February 09, 2021

Overall registrations down 10% YoY, says FADA

After showing a year-on-year (YoY) growth in December, automobile registrations declined yet again in January, falling 9.66 per cent against January 2020, the Federation of Automobile Dealers Association (FADA) said on Tuesday. Registration data compiled from the Centre’s VAHAN portal reflect retail sales of automobiles.

All categories except tractors were in the red, it said, adding that YoY, two-wheeler (2W), three-wheeler (3W), commercial vehicle (CV) and passenger vehicle (PV) registrations fell 8.78 per cent, 51.31 per cent, 25 per cent and 4.46 per cent, respectively. Tractors continued to see strong momentum with a YoY growth of 11.14 per cent, FADA said.

The association added that non-availability of vehicles due to scarcity of semiconductors, fading pent-up demand and recent price hikes coupled with no festivities and auspicious days landed January registrations in the negative zone.

While dealer inventory for PVs continued to fall and come in the range of 10-15 days, 2W inventory stayed put at 30-35 days, it said.

PV retail sales in January were recorded at 2,81,666 units, as a semiconductor shortage impacted the segment, compared with 2,94,817 units in January 2020. Similarly, 2W sales declined to 11,63,322 units (12,75,308 units).

 

Weakening demand

“The auto industry clearly misjudged the demand which returned post lockdown,” said FADA President Vinkesh Gulati. “The industry’s underestimation of post-Covid rebound, along with chipmakers prioritising the 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 PVs, even though enquiry levels and bookings remained high. New launches and SUVs continued to see high traction and helped in restricting the overall PV registrations fall by a bigger margin.”

Gulati hailed the Centre's announcement of a scrappage policy, though voluntary. The final contours of the policy, though still awaited, will decide its attractiveness and popularity, he said.

This, and the proposal to induct more buses in public transport, increased infrastructure spending and building national highways, will play a pivotal role in reviving the CV segment in the long term, he added.

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Published on February 09, 2021
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