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Ratings agency ICRA has said that India's domestic automobile industry is expected to record moderate growth in volumes in FY24, but a sustained recovery in demand sentiments remains to be seen, amid concerns over the impact of an uneven monsoon on rural demand. It stated the industry has been on a comeback trail over the past two years, aided by a recovery in economic activities and increased mobility although the pace of revival across the various automotive segments has been somewhat mixed.

It mentioned the passenger vehicle segment reached all-time high volume levels in FY23, aided by a preference for personal mobility and stable semiconductor supplies and the demand sentiments are expected to remain healthy in the segment, 6-9% year-on-year (YoY) growth in FY24. Similarly, the commercial vehicle industry's overall industry volumes are expected to approach pre-pandemic highs, even as the growth is expected to remain at modest levels in FY24, 2-4% YoY, on a healthy base.

The segment had witnessed a robust growth in volumes in FY23 on a curtailed base. In contrast to these two segments, the two-wheeler industry has continued to struggle with industry volumes still below the pre-Covid peak levels. ICRA Senior Vice President & Group Head - Corporate Ratings Shamsher Dewan said ‘We expect growth across the automotive industry segments to remain at moderate levels in FY2024. While the passenger vehicle volumes would continue to trend upwards, aided by favourable demand drivers, the two-wheeler industry is also expected to record moderate growth in volumes aided by a low base.’