International market research agency Frost & Sullivan has forecast that despite the fall in FY’14, growth is expected in the Indian automotive industry over the next five years due to policies announced by Government in the interim budget and with improving affordability, rising incomes and untapped markets.
The agency, in its report, The Indian Automotive Forecast, pointed out that the Passenger Vehicles (PV) market is primarily aspiration driven and the launch of new models will spur the growth of this segment. It also added that launch of technology loaded models with attractive optional features will be the key to growth in this segment.
As for Commercial Vehicles sector, the report noted that with growing infrastructure, like better roads and Mega Corridors, the path is open for high powered vehicles with better mileage and higher payload capacity. With fleet operators switching to Fleet Management Services to reduce the vehicle down time and increased efficiency by managing their routes real-time, these new vehicles will prove a boon to them as they come with these devices built in them by the OEMs.
Another factor in favour of growth is the evolution of urban areas that adopt the Hub and Spoke model which will pave the way for the use of Small Commercial Vehicles (SCVs) and Light Commercial Vehicles (LCVs) for end connectivity; leading to growing sales figures in these segments.On the whole, the Commercial Vehicle segment is likely to grow at a CAGR of 6.4 percent backed by the growth of Small Commercial Vehicles and Intermediate Commercial Vehicles (ICVs).
The report highlighted Two Wheelers as the most vibrant and transforming segment of the overall Indian automobile industry, witnessing an unprecedented growth both in rural and urban areas.Overall, the domestic two wheeler market is likely to grow at a CAGR of 5.3 percent over the next five years.
The report also predicted that the domestic three-wheelers passenger segment is set to benefit from product upgradations (two-stroke to four-stroke, petrol/diesel to CNG, front engine to rear engine vehicles) as well as opening of fresh permits by various state governments to be growth factors for the industry.
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