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FADA issues press release indicating 2.7% decline in overall vehicle retail sales for November 2021

News: As per FADA data, auto sector retail volumes fell 2.7% YoY in November 2021 to 18.2 lakh units (2-W down 0.8%, PV down 19.4%, tractors down 9.1%, CV up 13.3%).

Views: November retails came in healthy and also partly captures the retails incurred during the festive period. Demand pressure exists in the 2-W space with PV category retails impacted by supply side issues amidst chip shortages. Silver lining for the month was higher double digit growth in the 3-W and M&HCV segment, albeit on a low base amid improving macro-economics. Going forward with 2-W segment inventory at ~30-35 days as of November end (down from 40-45 days as of October end) vs. desired level of 21 days, we expect OEM wholesale volume prints to be soft in December 2021 and most likely mirror November 2021 readings.

Impact: Neutral