Vehicle Registration Drops By 9.66% In January On Yearly Basis 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

After showing a one-time Year-on-Year (YoY) growth in December, vehicle registrations once again fell by 9.66 per cent for the month of January. Federation of Automobile Dealers Associations (FADA), the apex national body of Automobile Retail Industry in India in its report for the month of January said that on YoY basis sectors such as two wheeler, three-wheeler, consumer vehicle and private vehicle. However, the tractor continued to show its strong growth.

Two-wheeler, three-wheeler, consumer vehicle and private vehicle registration fell by 8.78 per cent, 51.31 per cent, 25 per cent and 4.46 per cent. Tractor clocked its growth rate at 11.14 per cent.

It is to be noted that these numbers are not the wholesale number released by manufacturers which fails to grab the mood of the consumer.

Commenting on the performance of the automobile sector in the first month of the year, Vinkesh Gulati, president of FADA said, "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."

He further added that new launches and SUV's were seeing a high traction and prevented the fall of private vehicle registrations by high margin.

The price hike by Auto OEMs has further dented the pocket of lower and middle income class families who were eyeing to purchase two-wheelers. Commercial Vehicle registrations were also hit due to vehicle financing still not back to normal and high BS-6 cost.