Auto sector outlook 2024: Single-digit growth expected due to high base

Auto sector outlook 2024: Zee Business analysts believe that a recovery in sales of small vehicles will be important for overall industrial growth.

Representative image. Source: Reuters

Auto sector outlook 2024: The auto sector is expected to put up a moderate performance in 2024, as sales growth is expected to slow. As per Zee Business Research desk, low-single-digit growth is likely in passenger vehicles, whereas high-single-digit growth is expected in the two-wheeler segment.

Zee Business analysts believe that a recovery in sales of small vehicles will be important for overall industrial growth.

The research desk further stated that auto sector players' focus will be on the electric vehicle (EV) segment in 2024, as a number of companies are planning to launch new EVs. Additionally, the auto industry is optimistic that the government will launch another phase of Faster Adoption and Manufacturing of Hybrid & Electric Vehicles in India (FAME India) after March 2024.

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Giving an outlook on the auto sector in an interview with Zee Business, Shashank Srivastava, Senior Executive Director, Maruti Suzuki India, said that the sector is expected to grow in a single digit to a high base.

Srivastava also said that wholesale sales decreased in December this year, but there is no sign of volume slowing down as companies reduce their wholesale in the year-end and focus on retail. Srivastava believes that the demand for SUVs will continue.

Further, Srivastava said that the industry's order book as of January 1, 2023, was 10 lakh, which has been reduced to 4.5 lakh in 2024 as the year has been better in terms of production. Also, auto companies will hike prices in January.

Talking about the retail auto loan, he said that the increase in interest rate by the Reserve Bank of India (RBI) of 250 basis points (bps) has not been fully passed on in 2023. Thus, the interest on auto retail loans is expected to increase by 4 per cent in 2024.

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