Auto Industry May Grow At High Single-Digit Rates In Fiscal 2024: Report


Auto Industry May Grow At High Single-Digit Rates In Fiscal 2024: Report

The demand sentiments for a majority of the automotive segments have remained wholesome

Mumbai:

The home automotive trade has seen a wholesome revival within the present fiscal, aided by a restoration in financial actions and elevated mobility, and is predicted to develop at excessive single-digit ranges throughout segments in FY24, a report stated on Wednesday.

Category-wise, passenger and industrial car volumes may see a progress of 6-9 per cent and 7-10 per cent, respectively, the two-wheeler and tractors are estimated to develop at 6-9 per cent and 4-6 per cent, respectively, within the monetary 12 months beginning April 2023, home credit score rankings company Icra stated.

According to the company, the demand sentiments for a majority of the automotive segments similar to passenger autos, industrial autos and tractors have remained wholesome, aiding within the improved off-take for the trade members.

However, the two-wheeler trade continues to battle with trade volumes nonetheless under the pre-Covid peak ranges; at the same time as improved off-take within the current festive and marriage season has offered optimism, a sustained restoration in demand sentiments is but to be seen, it stated.

The same pattern of comparatively weak off-take has been seen for the entry-level automotive phase, implying that the buying energy of the customers on the backside finish of the pyramid has been eroded to an extent over the previous few years by the numerous rise in car costs (a results of worth hikes to fight inflationary pressures and meet stringent regulatory necessities) and disruptions brought on by the pandemic, Icra stated.

“We count on progress throughout automotive trade segments to stay at excessive single-digit ranges in FY2024. While the passenger car, industrial car, and tractor phase volumes would proceed to pattern upwards, aided by beneficial demand drivers, the two-wheeler trade can be anticipated to file average progress in volumes aided by a low base,” stated Shamsher Dewan, Senior Vice President at Icra.

The Union Budget 2023-24 is predicted to incorporate enhanced budgetary outlays in the direction of rural employment beneath MGNREGA, rural infrastructure growth, enhancement of irrigation amenities, crop insurance coverage scheme, in addition to a rise in targets for agricultural credit score, he stated.

With measures to assist rural communities anticipated to be on the coronary heart of its insurance policies, the funds is predicted to assist in boosting the rural-led demand throughout segments, Dewan added.

Even as electrical two-wheelers have accounted for roughly 85-90 per cent of the whole EV gross sales (excluding the e-rickshaw phase) aided by subsidies supplied by the federal government, electrical car penetration throughout segments is rising at an exponential price, it said.

Icra has a forecast of a CAGR of round 6-9 per cent throughout automotive segments over the medium-to-long time period. Supporting underlying elements similar to rising per capita incomes, demographic profile, low car penetration, beneficial coverage surroundings together with infrastructure growth and so forth are anticipated to assist develop the trade demand at a gradual tempo, the rankings company stated.

(Except for the headline, this story has not been edited by NDTV employees and is printed from a syndicated feed.)

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