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The Domestic Passenger Vehicle Market Touches 13.4% Growth In q2 Of Fiscal 2018

Posted on: Nov-2017 | By: MarketNReports | Automobile

The wholesale deliveries of the domestic passenger vehicle increased by 13.4% in the Q2 of financial year 2018. The growth was backed with recovery in rural income, re-stocking of inventory by dealers after the introduction of GST, moderate cost of car ownership owing to lower EMIs, and encouraging demand momentum.

As per the report of ICRA, the trend of growth was up to the mark and was going along with previous estimates, where it projected re-stocking of inventory and complimentary macros to back the strong wholesale dispatch.

The economy in the rural seems to be gaining a swift momentum owing to introduction of Seventh Pay Commission, minimum support prices, good monsoon in majority parts of India, and farm loan waiver led by government.

Two major OEMS, Maruti Suzuki India and Mahindra & Mahindra, have a noteworthy network in rural segment and have seen an appreciable growth in the wholesale dispatches in the recent period.

The demand from urban regions also remains to flourish owing to moderate inflation, introduction of Seventh Pay Commission, and favorable customer response.

Senior Group Vice-President, Corporate Sector ratings, ICRA, Subrata Ray stated that the GDP growth rate is projected to speed up in the H2 of financial year 2018 and will remain favorable in terms of overall macroeconomic pointers. The income of rural segment is anticipated to recuperate owing to the satisfactory monsoon all over the country. In addition, decreasing interest rate and manageable fuel prices have also motivated the customers to have an ownership of the car.

As per the projection the sales growth of the passenger vehicle is estimated to grow at the rate of 9–10% in fiscal year 2018, and is targeted to maintain it at 9–11% in the coming five fiscal years. The growth rate is also expected to speed up further by 100–150 bps if there is a prompt recovery in economic activity.

Growing spending ability of the average earning individual and availability of various affordable vehicles have motivated the growth of the passenger vehicles in Indian market. Festive occasion and exclusive discounts offered by various auto dealers has also fostered the growth of the automobile market.