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The automotive sector is expected to perform well in the coming years, especially in the two-wheeler (2W), tractor, and SUV segments, according to the Nuvama report.
Experts believe these categories will see high single-digit growth between FY25 and FY27, while growth in cars (passenger vehicles or PVs) and commercial vehicles (CVs) may remain slower. June 2025 is likely to bring a mixed performance in vehicle sales. Two-wheeler and tractor sales are expected to benefit from strong rural demand and the ongoing marriage season. This could result in high single-digit year-on-year (YoY) growth. However, PV and CV sales may remain muted, with a slight decline compared to last year. Passenger vehicle sales are under pressure due to weak consumer sentiment. Fewer people are showing interest in buying cars, and many are delaying their purchases. In the two-wheeler segment, domestic sales are expected to grow by around 7 per cent YoY, thanks to rural demand and wedding-related purchases. Tractor sales are also projected to grow around 7 per cent YoY, supported by positive sentiment among farmers, good monsoon expectations and a favourable comparison with last year's lower base. Farmers are hopeful for a good monsoon, which is likely to support demand. The passenger vehicle segment is expected to see a marginal decline of around 5 per cent YoY. Commercial vehicle sales are expected to stay subdued, with a 4 per cent decline in the domestic market. Although freight movement has improved, thanks to higher e-way bill generation, other issues such as limited financing, inventory build-up in May before new AC rules, and decent fleet availability are slowing down sales. While two-wheelers and tractors are likely to perform well due to rural demand and positive sentiments, the car and truck segments may face slower growth due to weak consumer interest and financial challenges. (ANI)
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