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FADA indicates 16.05% decline in overall vehicle retail sales for December 2021

News: According to FADA data, auto sector retail volumes fell 16.05% YoY in December 2021 to 15.6 lakh units (2-W down 19.8%, PV down 10.9%, tractors down 10.3%, CV up 13.7%).

Views: December retail came on the lower side with double digit decline on YoY basis. Demand pressure exist in 2-W space with inventory level being around 30 days. PV sales continue to be constrained by chip shortages but with gradual improvement in supply chain, this space is expected to report better numbers, going forward. CV and 3-W space continue to witness double digit growth, albeit on a lower base. Going forward, we expect retails to be ~80-85% of pre-Covid levels amid increasing incidence of Covid infections domestically.

Impact: Positive