In The Red Zone: January 21 Vehicle Registration Data Fall By 9.66%

After showing a one-time YoY growth in December, January registrations once again fell by -9.66% according to the latest data released by the Federation of Automobile Dealers Associations (FADA). While Dealer inventory for Passenger Vehicles continued to fall and came down in the range of 10-15 days, Two Wheeler inventory at the dealer level stayed put at 30-35 days.

All India Vehicle Registration Data for January’21

Source: FADA Research

“Auto Industry clearly misjudged the demand which returned post lockdown. The industry’s underestimation of post-covid rebound along with chipmakers prioritizing the higher-volume and more lucrative consumer electronics market has created a vacuum for semiconductors. This has resulted in a shortage in supply for all categories of vehicles especially Passenger Vehicles 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.

The recent price hike undertaken by Auto OEMs also added to woos as Two Wheelers 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.” Said FADA President, Mr. Vinkesh Gulati

According to Fada, All Sectors except Tractor were in the red. On a YoY basis, Two Wheelers fell by -8.78%,, Three Wheelers by -51.31%, Commercial Vehicles by -25%, and Passenger Vehicles fell by -4.46%. Meanwhile, Tractors continued an upbeat momentum with a YoY growth of 11.14%.

After showing a one-time year-on-year growth in December, January vehicle registrations once again fell by 9.66%. According to FADA, 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 the negative zone.

The Apex Dealer Association remains guarded in its outlook for the Q4 of this financial year - 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 the gradual opening of academic institutes and business as usual along with Covid Vaccine’s effectiveness on the other.