Summary

Automotive original equipment manufacturers (OEM) will likely continue to witness modest growth this fiscal, after strong volume growth during fiscals 2021-2024. Expected reduction in interest rates, benefits of higher disposable income due to change in personal income tax rates, and new model launches in select segments will provide some support.

Volume growth in fiscal 2026 will be led by two-wheelers - both, motorcycles and scooters - including premium models, followed by passenger vehicles (PVs), mainly utility vehicles, with a record number of new model launches expected. A gradual recovery is expected in the commercial vehicles segment as well, led by replacement demand and pickup in industrial activity. Expectation of a normal monsoon and projected rise in minimum support prices will likely support tractor volume.

Operating profitability across automobile segments will continue to witness improvement, supported by operating leverage benefits, continuing price hikes, stable input costs and premiumization trends.

Capital expenditure (capex) will continue to be sizeable, led by the PV segment and geared towards capacity enhancements and new launches, including in the electric vehicle (EV) segment. Capex in other OEM segments will be directed mainly towards debottlenecking and regular maintenance.

New regulations, including government policies on EVs, and the impact of changes in global trade policies will remain monitorable.

To discuss these aspects in detail, Crisil Ratings is hosting a webinar on Wednesday, April 30, 2025, at 3 pm, where its experts will delve into:

• Growth expectations and demand drivers across key automotive segments
• Profitability trends of OEMs
• Capital spending trends and credit quality outlook

This will be followed by a panel discussion and Q&A.

Do dial in.

Eminent panellists:

For any assistance/ query, please email: Keegan Po | keegan.po@ext-crisil.com

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.