Passenger Vehicle Sales to Hit Record High 🚗📈
The passenger vehicle segment in India is set to achieve an all-time high this financial year. Both domestic and export sales are expected to cross 5 million units in total. However, the growth rate may slow down to 2-4 percent, according to a recent report from Crisil Ratings.
Fourth Year of Record Sales 📊
This year marks the fourth consecutive year of record sales in the passenger vehicle industry. Sales have decreased significantly since the 25 percent surge in FY 2023, following the aftermath of the Corona epidemic.
Utility Vehicles Drive Growth 🚙
Utility vehicles (UVs) are expected to boost sales due to new launches, lower interest rates, and increased adoption of CNG. Favorable conditions in rural areas will also contribute to this growth. Anuj Sethi, a senior director at Crisil Ratings, stated that while the overall growth rate for passenger vehicles will be 2-4 percent, UV growth could reach 10 percent.
Rural Demand and Economic Factors 🌾
With better monsoon conditions and improved interest rates, demand in rural areas is expected to strengthen. This will support the overall growth of the market. Utility vehicles will account for 68-70 percent of the total volume.
Investment and Export Challenges 💰🌍
Original Equipment Manufacturers (OEMs) are expected to maintain high capital expenditure, estimated at Rs 30,000 crore. While current geopolitical tensions may slow export speeds, OEMs are looking to alternative markets like Mexico, Gulf countries, and East Asia.
Future Outlook 📅
The report suggests that despite challenges, the OEMs will remain stable with strong internal sources and a cash surplus. The Caux-to-Ebita ratio is stable at 0.5 times, indicating a solid financial position.
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