Indian passenger car sales are expected to increase by 9-10 percent in the fiscal year 2023-24, about 20 percent higher than pre-pandemic levels, rating agency Crisil said in a report on Wednesday, March 1.
Higher incomes and strong order books driven by pent-up demand will support domestic growth, while exports will remain sluggish, enabling local sales to touch 5 million units in the fiscal year 2023-24, Crisil stated.
Strong demand should help soften the hit to car part manufacturers from higher costs due to new regulations which require all vehicles to achieve emissions targets in real-world conditions, besides being tested in a laboratory environment, Crisil said.
Operating margins are expected to improve to 9-10 percent in 2023-24 from 8.0-8.5 percent in the current year and this will help original equipment manufacturers (OEMs) set up additional capacity including for electric vehicles.