Automotive firms might hit highway to sturdy gross sales subsequent yr, ETCFO
Gross sales of passenger autos are anticipated to develop by 5% in calendar yr 2025 towards a excessive base, indicating wholesome client demand on the again of a pick-up in authorities spending, good monsoon rain and robust client sentiment in rural markets resulting from sturdy crop yields, a number of senior business executives ET spoke to mentioned.
Whereas gross sales of SUVs will stay robust, carmakers anticipate demand for entry-level small automobiles to rise as indicated by a spurt in two-wheeler gross sales in current months.
After six months of sluggish development on this fiscal yr, automobile gross sales grew by about 1% in October and 4% in November. Passenger car gross sales grew by 3% within the first quarter.
In truth, India is among the few markets globally the place auto gross sales have rebounded sharply publish the pandemic. That pushed automobile gross sales over the 4 million mark for the primary time in 2023, after which once more in 2024.
With basic elections having bought over, automakers anticipate an uptick in authorities spending and the better-than-expected monsoon to spice up gross sales within the coming yr.
“I really feel subsequent yr the business will develop by 5%. Authorities investments shall be again. IT layoffs are behind us,” mentioned Hardeep Singh Brar, senior vp and head, gross sales and advertising and marketing, Kia India. “There are early alerts of revival within the sector with main firms asserting recent hiring plans not too long ago. Good monsoons too will play an enormous function in boosting development within the yr forward.”
Financial exercise is anticipated to rise within the coming yr led by rural consumption and the anticipated improve in authorities spending, HDFC Securities mentioned in its newest report Sunday.
“India will largely be an outlier within the GDP development in comparison with its international counterparts,” mentioned Dhiraj Relli, MD and CEO, HDFC Securities. “We anticipate the expansion for FY26 to be volume-led, with BFSI, industrials, cement, power and IT sectors being the engine drivers.”
The Indian financial system is anticipated to broaden by 6.7% in FY26.
“Automotive gross sales within the upcoming yr will rely upon pure-play financial system because the market when it comes to demand and provide is regular,” mentioned an business veteran “Whereas the proportion development is more likely to be small, you will need to think about the truth that this development is approaching a really excessive base of about 4.3 million items. One issue (for wholesome development forward) appears to be an expectation that the slide in small automobile gross sales might have seen bottoming out judging by two-wheeler gross sales.”
Gross sales of bikes, scooters and mopeds rose by as a lot as 16.2% to 18.44 million items between January and November CY2024, in keeping with Society of Indian Vehicle Producers (SIAM) knowledge.
In December, dispatches of automobiles from factories to dealerships are estimated to have gone up by 10-12% to 315,000-322,000 items with producers replenishing shares at dealerships after sturdy gross sales within the festive season.
