Maruti Suzuki Alto cars to be exported are parked in a holding area at Adani Ports and Special Economic Zone in Mundra, 400km from Ahmedabad. Photo: AFP / Sam Panthaky

Car sales in India registered double-digit growth in the month of December, while commercial vehicle sales continue to be in the red, says an automobile dealers body.

After collating vehicle registration data, the Federation of Automobile Dealers Associations has stated that the sale of passenger vehicles or cars rose 23.99% in December to 271,249 units, up from 218,775 units in the same period last year. However, the growth comes on a low base as most automakers had last year slashed production of cars due to weak demand amid transition to more stringent Bharat Stage-VI emission norms. On a sequential basis it is lower than November (291,001 units).

Two-wheeler sales have increased for the first time since the pandemic struck. It rose 11.88% to 1,424,620 units in December, compared with 1,273,318 units last year. This is also higher than sales in November (1,413,778) and October (1,041,682) this year.

On the other hand, the demand for commercial vehicles and three-wheelers remains tepid. Commercial vehicle sales slipped 13.52% to 51,454 units in December 2020, as against 59,497 units a year ago, while three-wheeler sales halved (down 52.75%) to 27,715 in December, from 58,651 units last year. Commercial vehicles have been facing a demand slump even before the pandemic due to a slowing economy and the revision of vehicle loading norms in 2018, which led to excess capacity in the transport sector.

However, tractor sales bucked this trend and continued to post robust growth, as the agricultural sector and the overall rural economy continued to remain upbeat despite the pandemic. In December, it grew 35.49% to 69,105 units, from 51,004 units last year. Many manufacturers were forced to cut down on exports to meet the surging local demand.

The automobile body had compiled the report based on data collected from the Indian Road Transport and Highways Ministry’s Vahan portal. Vehicle registration data of 1,270 out of the 1,477 regional transport offices is available on this platform. Data from transport offices in Andhra Pradesh, Madhya Pradesh, Lakshadweep and Telangana states are yet to migrate to the Vahan portal.

The overall vehicle registrations with regional transport offices in the country grew by 11% during December over the same month last year. This is for the first time monthly growth has been registered this fiscal, according to Federation of Automobile Dealers Associations president Vinkesh Gulati.

Market analysts attribute the rise in sales of passenger vehicles to spillover demand from the festive period and advancement of purchases due to planned price hikes across the industry in January. Almost all major carmakers, including Maruti Suzuki and Hyundai, have decided to pass on a portion of their increase in input costs caused by the pandemic disruption to buyers.