Vehicle registrations, which also indicate retail auto sales, fell over 16% Year-on-Year (YoY) in December 2021 to 15.59 lakh as against 18.79 lakh in December 2020, as per data shared by the Federation of Automobile Dealers Associations (FADA).
While passenger vehicle retail sales fell 11% last month to 2.45 lakh units, two-wheeler sales, affected by bad rural sentiment and rising ownership cost, fell nearly 20% in December to 11.49 lakh units.
FADA President Vinkesh Gulati said, “The month of December is usually seen as a high sales month where OEMs continue to offer best discounts to clear the inventory due to the change of year. It was however not the case this time around as retail sales
continued to disappoint thus wrapping up an underperforming calendar year."
He added that with semi-conductor shortage continuing to play spoilsport, PV sales in spite of huge bookings in December closed in the red.
On two-wheeler sales, Gulati said, "The 2W segment however was on a different trajectory when compared to PV. High cost of ownership, bad rural sentiment, work from home and the latest threat of omicron continued to impact sales."
On the near-term outlook, Fada said that various state governments have once again announced Covid restrictions. "Work and education from home have resumed and will have a negative effect for auto retail. With the fear of health care expenses rising again, customers are shying away from closing their purchase decisions," it added.
India on Wednesday reported a single-day rise of 58,097 new coronavirus infections, the highest in around 199 days. A total of 2,135 cases of the Omicron variant of coronavirus have been detected across 24 states and UTs so far.
With IIT Kanpur predicting the peak of Omicron sometimes in the first week of February, Fada said that it remains extremely cautious over the next 2-3 months.