Credit ratings agency, Crisil Ratings in its latest report has lowered its sales growth forecast for the passenger vehicles (PVs) industry to 7-9 percent, from its previous estimate of 9-11 percent for the financial year 2019, largely due to sluggish demand and higher inventory even during the festive season. It also indicated that sales of domestic PVs increased by 1.55 percent to 2,84,224 units in October from 2,79,877 units in the corresponding month last year, halting three months of consecutive decline, although low market sentiments affected festive season demand. It added that of this, the car sales volume saw a flat growth, while the utility vehicles segment registered a 4 percent growth.
The ratings agency has stated that Dusshera and Diwali period (September and October/November), which typically contributes a fifth of annual sales, haven’t exactly sparkled for automobile makers or original equipment manufacturers (OEMs). It also observed that over the first 10 days of October, sales were affected due to shraadh (traditionally considered an unauspicious period), during which people in north India don’t buy new cars.
According to the report, sales of commercial vehicles continued to grow at a double-digit rate for the 12th straight month in October, increasing 25 percent year-on-year. It noted that this growth was led by an 18 percent rise in the sales volume of medium and heavy commercial vehicles (MHCV) and a 29 percent rise in the sales volume of light commercial vehicles (LCV). It pointed out that the strong growth momentum in MHCV sales volume was driven by higher growth in the tipper segment, backed by a rise in construction spending and an uptick in industrial activity. It added that the LCVs continued to benefit from steady demand from the rural economy and the consumption-driven and e-commerce sectors.
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