Thursday, March 13, 2025
News

Auto sector gloom may continue in 3Q FY25, slowest growth of 11 quarters projected: Report

   SocialTwist Tell-a-Friend    Print this Page   COMMENT

New Delhi | January 8, 2025 12:42:23 PM IST
The auto sector's earnings growth in the third quarter of FY25 is projected to rise by only 3 per cent year-on-year (YoY), marking the slowest pace in the last 11 quarters, according to a report by Motilal Oswal Financial Services.

The report noted that this modest growth comes despite the festive season, which typically drives higher sales for the automobile industry.

It said "The Auto sector's earnings are likely to rise 3 per cent YoY during the quarter. The Auto OEMs are expected to deliver just around 6 per cent YoY volume growth in 3QFY25, despite the festive season".

The report highlighted that the two-wheeler (2W) segment, which has been a key growth driver for the auto sector in the first half of FY25, experienced a significant slowdown in Q3.

In the domestic 2W sales by the four listed 2W OEMs remained flat YoY in Q3, a sharp decline from the 15 per cent growth witnessed in the first half.

The report stated "Subdued dispatches even in festive season; demand outlook remains weak"

However, there is a silver lining as 2W exports have shown signs of recovery in key markets, including Africa.

In the commercial vehicle (CV) segment the report said that the demand continued to remain weak in Q3, with the top three listed original equipment manufacturers (OEMs) posting flat YoY growth in CV sales during the quarter.

On the other hand, the passenger vehicle (PV) segment saw a recovery after weak demand in the first half of FY25. The top four listed PV OEMs recorded a 10 per cent YoY growth in PV sales in Q3, compared to flat growth in the first half.

Another positive development for the sector was the marked recovery in tractor demand. The two listed tractor OEMs posted a strong 17 per cent YoY growth in Q3, rebounding from flat growth in the first half of the fiscal year.

As per the FADA data, in December, the last month of 2024, overall retail automobile sales declined by 12.4 per cent, with two-wheelers (-17.6 per cent), three-wheelers (-4.5 per cent), PV (-1.9 per cent) and CV (-5.2 per cent) facing de-growth. Only tractor showed a 25.7 per cent yearly jump in sales in December.

In the near term, FADA asserts that about 48 per cent of the automobile dealers expect growth in January, 41.22 per cent see flat sales and 10.69 per cent predict a slowdown.

Two-wheeler demand could benefit from improved MSP and rural liquidity, though financing and electric vehicle transition remain key challenges.

The report highlights mixed trends across segments, reflecting both challenges and recovery signals for the auto sector during Q3FY25. (ANI)

 
  LATEST COMMENTS ()
POST YOUR COMMENT
Comments Not Available
 
POST YOUR COMMENT
 
 
TRENDING TOPICS
 
 
CITY NEWS
MORE CITIES
 
 
 
MORE BUSINESS NEWS
India's Index of industrial production r...
Raft Motors Pvt Ltd Introduces Reliable ...
Confluent Kicks Off Current 2025 in Beng...
Healthcare Logistics Start-up TEN Raises...
FIFI Pavilion Inaugurated at AAHAR 2025 ...
GDP Growth of US economy to slow down gr...
More...
 
INDIA WORLD ASIA
Gujarat CM Bhupendra Patel, Speaker Shan...
Tripura: Community-driven programme expl...
Kerala police arrests wanted crypto king...
'New education policy is impossible toda...
Man gets life sentence for sodomising, m...
Committee probing allegation of 40 pc co...
More...    
 
 Top Stories
Hockey Jharkhand clinches 15th Hock... 
With maiden WPL final in sight, Guj... 
IML 2025: Australia Masters outwit ... 
KKR CEO Venky Mysore reveals why Ra... 
PM Modi returns to India after conc... 
"Entire nation deeply shocked by th... 
Israel Ambassador hosts Iftar dinne... 
'Landman' renewed for Season 2...