Automobile and auto ancillary sectors are expected to see slower revenue growth in FY25, according to a research note from Nomura. Passenger vehicle (PV) sales, the largest contributor to the sector, are projected to grow by just 1.5% to 4.28 million units, compared to an 8.4% growth last year when 4.21 million units were sold. 

Commercial vehicle sales are forecasted to remain flat at 968 units, following a 0.6% rise the previous year. Two-wheeler sales are expected to grow by 10% to 20,301 units, while three-wheeler sales are also projected to rise by 10%, a sharp slowdown from the 41.5% growth seen last year. Except for tractors, all segments are likely to experience modest growth over the next two fiscal years. 

Nomura’s report highlights the continued trend of premiumisation, with SUV sales remaining stable, while mass affordable segments struggle to gain momentum. In the electric vehicle (EV) space, Indian two-wheeler companies sold an average of 94,000 units per month recently, with Ola Electric maintaining about a third of the market share. 

The slowdown in the auto sector is also mirrored in the auto ancillary industry. Credit rating agency ICRA projects revenue growth for large auto ancillary firms to moderate to 7-9%, reaching around Rs 3.4 billion in FY25, down from 14% growth in the previous year. 

(The Hindu)