ICRA Projects Modest 1–4% Growth for Passenger Vehicle Industry This Fiscal | Auto

ICRA Projects Modest 1–4 Growth For Passenger Vehicle Industry This Fiscal

The domestic passenger vehicle (PV) industry is likely to post only modest growth in the current fiscal, with wholesale volumes estimated to rise by 1–4 per cent, according to ratings agency ICRA. The forecast comes amid concerns of elevated inventory levels and a high base effect from last year.

Between April and July, industry volumes contracted by 1.1 per cent year-on-year. However, July brought some relief, with wholesale sales growing 8.9 per cent sequentially as automakers ramped up stock ahead of the festive season. On a year-on-year basis, though, volumes remained flat at around 3.4 lakh units.

Retail trends showed a similar pattern. Registrations rose 10.4 per cent sequentially in July but slipped 0.8 per cent compared with the same month last year, data showed. Industry inventory levels, meanwhile, climbed to 55 days by the end of July, according to the Federation of Automobile Dealers Association (FADA).

Segment-wise, sport utility vehicles (SUVs) continued to dominate the market, accounting for 65–66 per cent of total PV sales. Utility vehicles are expected to remain the main growth driver in the near term, ICRA added. Exports provided a bright spot, registering a 9 per cent year-on-year increase in July. Maruti Suzuki led the gains, followed by Hyundai Motor India, though the growth came on a relatively low base.

Looking ahead, ICRA said steady model launches by original equipment manufacturers (OEMs) and possible tax relief could support demand in select categories. The central government has proposed reforms in the Goods and Services Tax (GST) structure, which currently has four slabs: 5, 12, 18, and 28 per cent. Under the proposed changes, the number of slabs would be reduced to just two: 5 and 18 per cent.

Automakers are also preparing to release their August sales numbers on September 1, which will give a clearer picture of demand momentum heading into the festival season.

(With inputs from PTI)

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}