Domestic automotive industry expected to grow at high single-digit levels across segments in FY24: ICRA
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Domestic credit ratings agency ICRA in its latest report has said the domestic automotive industry has seen a healthy revival in the current fiscal, aided by a recovery in economic activities and increased mobility, and is expected to grow at high single-digit levels across segments in FY24. It stated, category-wise, passenger and commercial vehicle volumes could see a growth of 6-9 per cent and 7-10 per cent, respectively, the two-wheeler and tractors are estimated to grow at 6-9 per cent and 4-6 per cent, respectively, in the financial year starting April 2023.
According to the report, the demand sentiments for a majority of the automotive segments such as passenger vehicles, commercial vehicles and tractors have remained healthy, aiding in the improved off-take for the industry participants. However, it said the two-wheeler industry continues to struggle with industry volumes still below the pre-Covid peak levels; even as improved off-take in the recent festive and marriage season has provided optimism, a sustained recovery in demand sentiments is yet to be seen.
It mentioned a similar trend of relatively weak off-take has been seen for the entry-level car segment, implying that the purchasing power of the consumers at the bottom end of the pyramid has been eroded to an extent over the past few years by the significant rise in vehicle prices (a result of price hikes to combat inflationary pressures and meet stringent regulatory requirements) and disruptions caused by the pandemic
