Quote on Rural demand for the Auto sector By Saji John, Geojit Financial Services
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Quote on Rural demand for the Auto sector from Saji John, Senior Research analyst Geojit Financial Services
An increase in purchasing power, due to better crop output, is likely to increase rural demand for entry-level vehicles. However, this segment has been struggling post-COVID, with a 35-40% increase in vehicle costs driven by changes in regulations and macroeconomic headwinds. During FY23, the entry-level 2W segment, which constitutes approximately 52% of the total volume (<125cc), has experienced a de-growth of -14% YoY. We believe that any positive triggers may support current valuations in the near term.
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