Crisil: Indian auto sector to see double-digit growth next fiscal year

Friday, 12 March 2021 11:17:31 (GMT+3)   |   Kolkata

After two consecutive years of sluggish market conditions, the Indian automobile sector is poised to enter double-digit growth next fiscal year, a report of credit rating agency Crisil said on Friday, March 12.

According to the Crisil report, passenger cars, two-wheelers and commercial vehicles are expected to see 23-25 percent, 18-20 percent and 34-36 percent growth, respectively, next fiscal year.

This compares to respective contractions of 3-5 percent, 12-14 percent and 19-21 percent respectively by the end of fiscal year 2020-21, the report said.

“Our analysis of 800 listed companies shows that salary cuts imposed in the first quarter of the current fiscal year have largely been restored in the manufacturing and information technology sectors. Consequently, sentiments in urban markets that account for 65 percent of passenger car sales and 40 percent of two-wheeler sales have improved significantly,” the report said.

Furthermore, the report said that the demand for commercial vehicles is expected to be stronger next fiscal year, riding on a significantly low base, improving economic activity since the third quarter of this fiscal year, and the government thrust on road infrastructure.

The gradual reopening of schools and offices, and the pick-up in the retail sector will support demand for buses and light commercial vehicles, the report added.

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