Nifty99000 100%

Sensex99000 100%

Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
Article rating: No rating
RSS

News

Domestic passenger vehicle sales to grow by 9-10% in FY18: ICRA

Author: IANS/Wednesday, August 9, 2017/Categories: Auto & Ancillary

Domestic passenger vehicle sales to grow by 9-10% in FY18: ICRA

New Delhi, Aug 9 - Domestic passenger vehicles (PV) sales will grow by a healthy compounded annual growth rate of 9-10% during 2017-18 and between 9-11% over the next five fiscals, a study said.

According to an ICRA study, the outlay for Seventh Pay Commission and the relative high levels of financing penetration in this industry, compared to other sub-groups like two-wheelers, supported the demand momentum despite demonetisation-related impact in the third quarter of 2016-17.

"PV sales could have registered healthy growth in Q1FY18 as well but impending GST and subsequent pricing uncertainty fizzled out the wholesale demand in Jun-17. Also, dealers were busy clearing inventory as tax offset was not available for certain components," the study noted.

"However, demand in July 2017 registered healthy growth riding on recovery in domestic wholesale dispatches, underlying robust demand drivers and inventory re-stocking by dealers."

The study said the PV segment is one of the important economic indicators and reveals a lot about the health of the economy.

"In this regard, the Indian PV industry is likely to consolidate further on its growth path for the fourth year in a row since FY2014, the year when it last witnessed a blip," it said.

The study pointed out that another key area was double-digit export growth at 13.8% during Q1FY18, which contributed about 20% of the total wholesale volume sales during FY17 and Q1FY18, with Ford, General Motors and Volkswagen emerging as the key growth drivers.

"Industry's long-term prospects remain favourable given the low penetration levels and increasing disposable income," said Subrata Ray, Senior Group Vice President, Corporate Sector ratings, ICRA.

"The overall macroeconomic indicators too remain favourable, with GDP growth expected at 7.2% in FY18, normal monsoon expectations which will boost rural income, and the price cut post GST that will provide impetus to the industry. This apart, the low cost of car ownership due to falling interest rate and subdued fuel prices will help," he said.

The study added that impending increase in cess from 15% to 25% on larger vehicles poses challenge and could derail demand momentum in the interim. 

 

Print Rate this article:
No rating

Number of views (248)/Comments (0)

S Vijaykrishnan
S Vijaykrishnan

IANS

Other posts by IANS
Contact author

Leave a comment

Name:
Email:
Comment:
Add comment

Name:
Email:
Subject:
Message:
x

Videos

Ask the Finapolis.

I'm not a robot
 
Dharmendra Satpathy
Col. Sanjeev Govila (retd)
Hum Fauji Investments
 
The Finapolis' expert answers your queries on investments, taxation and personal finance. Want advice? Submit your Question above
Want to Invest
 
 

Categories

Disclaimer

The technical studies / analysis discussed here can be at odds with our fundamental views / analysis. The information and views presented in this report are prepared by Karvy Consultants Limited. The information contained herein is based on our analysis and upon sources that we consider reliable. We, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and we are not responsible for any loss incurred based upon it. The investments discussed or recommended in this report may not be suitable for all investors. Investors must make their own investment decisions based on their specific investment objectives and financial position and using such independent advice, as they believe necessary. While acting upon any information or analysis mentioned in this report, investors may please note that neither Karvy nor Karvy Consultants nor any person connected with any associate companies of Karvy accepts any liability arising from the use of this information and views mentioned in this document. The author, directors and other employees of Karvy and its affiliates may hold long or short positions in the above mentioned companies from time to time. Every employee of Karvy and its associate companies is required to disclose his/her individual stock holdings and details of trades, if any, that they undertake. The team rendering corporate analysis and investment recommendations are restricted in purchasing/selling of shares or other securities till such a time this recommendation has either been displayed or has been forwarded to clients of Karvy. All employees are further restricted to place orders only through Karvy Consultants Ltd. This report is intended for a restricted audience and we are not soliciting any action based on it. Neither the information nor any opinion expressed herein constitutes an offer or an invitation to make an offer, to buy or sell any securities, or any options, futures or other derivatives related to such securities.

Subscribe For Free

Get the e-paper free