Stories
Auto Sector Eyes 5 To 7 Percent Growth Amid Strong Festive Demand
- •India's automobile sector expects to maintain positive momentum with 5 to 7 percent growth during the festive season.
- •Vinkesh Gulati of United Automobiles notes that while growth rates will moderate from over 20 percent seen earlier, ground demand remains strong.
- •GST cuts have improved affordability, successfully bringing both rural and urban buyers back to the market.
- •Inventory levels at dealerships remain comfortable at around 30 to 45 days, effectively supporting the ongoing festive sales.
- •A recent 25-basis-point rate hike may have a limited impact, potentially creating some pressure mainly for entry-level buyers.
Key Questions Answered
Auto dealers expect the automobile market to maintain positive momentum with passenger vehicle sales growing around 7% to 8% in October-November, and two-wheelers seeing growth of around 10%, keeping overall average growth at roughly 5% to 7% after an initial strong first half of the year.
Dealership inventory levels are currently sitting at a comfortable 30 to 45 days, down from nearly 60 days previously. Meanwhile, North India registers slightly higher inventory levels at around 45 days, which remains manageable given strong festive demand.
The recent 25-basis-point rate hike could exert selective pressure on entry-level and aspirational buyers due to higher financing costs, while premium customers are expected to absorb these increases more easily.
