Amid sluggish customer sentiments on the back of rising interest rate and fuel prices, rating agency ICRA in its latest reports has revised its growth forecast for domestic passenger vehicles (PV) sales to 7-8 percent for the current fiscal from the earlier projected growth of 8-9 percent. But, the agency maintained stable outlook on domestic passenger vehicles industry for the year.
As per the report, the domestic PV sales declined to 6.1 percent during the first seven months of the FY2019. Besides, it said that factors like floods in Kerala (during peak Onam season) delayed festive season and high base of Q2 FY2018 also weighed on overall growth rate during Q2 FY2019 resulting in domestic wholesale PV dispatched declining by 3.6 percent.
However, ICRA found that the credit profile of most PV original equipment manufacturer (OEMs) remains strong, on account of healthy cash accruals and financial flexibility provided by strong parentage. The rating agency further added that the overall capacity utilisation level in the industry also remains modest.