After another year of strong performance last fiscal, the automotive (auto) sector may see some slowdown this fiscal, given the high base and elevated interest rates.
Volume growth in fiscal 2025 will be led by two-wheelers - both motorcycles and scooters - including premium models, followed by passenger vehicles (PVs), mainly utility vehicles. Growth in sales of commercial vehicles will remain flattish due to the temporary slowdown amid elections and high base effect, even as tractors may see a moderate rebound on expectation of a normal monsoon.
Operating margins across segments will continue to improve moderately, supported by price hikes, stable input costs and increased sale of higher priced vehicles.
Capital investment by auto original equipment manufacturers (OEMs), especially in the PV segment, is seen rising, including for electric vehicles (EVs). Regulations and government policies towards EVs will remain monitorable.
For a deeper dive into the sector, CRISIL Ratings is hosting a webinar on Thursday, May 2, 2024, where our experts will discuss:
Growth expectations and demand drivers across segments
Disclaimer: This event and its content are intellectual property and confidential information of CRISIL. Any use of the same without written permission of CRISIL is illegal and hence punishable. Recording the webinar in any form in full or part or copying, altering, distributing or streaming the webinar is strictly prohibited and violation will attract legal action.
