Vehicle registrations in December 2020 logged an 11% growth on a year-on-year (YoY) basis, the first positive growth in a month in the current financial year.

Data released by the Federation of Automobile Dealers Associations (FADA) on Monday showed that over 18.44 lakh vehicles were registered last month, compared with over 16.61 lakh units in December 2019.

"December registrations for the first time in FY20-21 witnessed positive growth of 11% (YoY) largely due to the festival spillover demand and pre-buying due to announcement of price hike in January'21," said a FADA statement.

Registration of two-wheelers, personal vehicles, and tractor categories rose by 11.8%, 24%, and 35.5% (YoY) respectively while that of commercial vehicles and three-wheelers continued to decline by 13.5% and 52.7% respectively compared with the same period in 2019.

As per the data, dealer inventory continues to fall with personal vehicles' inventory ranging from 15-20 days and two-wheelers' inventory from 30-35 days.

Personal vehicle dealers continued to face supply-side issues for the second straight month, leading to higher waiting period that went as far as eight months.

Commenting on the registration data, FADA President Vinkesh Gulati said: "A good crop season, better offers in 2W segment, new launches both in PV as well as 2W and a fear of price increase in January 2021 kept the demand going."

"Supply-side issues in passenger vehicles continued for the 2nd straight month, thus making the waiting period stretch to as long as 8 months in select OEM vehicles," he said.

Gulati noted that the commercial vehicle segment continues to see demand pressure even though on a YoY basis the segment fell by 13.5%.

Increased intra-city goods movement continued to help small commercial vehicles outperform medium and heavy commercial vehicles' segments as axle-load norms, increased fuel and vehicle costs and higher freight rates continued to play the spoilsport, he said.

Tractors continue to outshine the supply for six straight months, further confirming the fact that the rural economy carries on to lead India's economic recovery, the FADA President added.

FADA looks forward to initiatives to spur demand in the upcoming Union Budget and specific initiatives for the auto industry to continue auto sales in higher gear, said the statement.