India Autos Report Q1 2015 - New Study Released

Over H114, passenger car sales fell by 0.5%, to 1,280,699 units, according to information on the Focus2Move website. This marks something of a recovery for a new vehicle market which declined by 9.8% across FY13/14 (April-March), to 3,134,204 units, according to figures from the Society of Indian Automobile Manufacturers (SIAM).

Breaking down the sales figures for the April-June period (the first quarter of FY14/15), passenger car sales were up by 1.3% year-on-year (y-o-y), whereas commercial vehicle sales were down by 16.1% y-o-y. Three-wheeler sales were up by 11.64% y-o-y and two-wheeler sales were up by 13.7%, boding well for a strong performance from this sector over the full year.

Looking forward, BMI believes the stage is set for a continued recovery in new vehicle sales over the remainder of FY14/15, targeting 3.3% growth, to reach 3.24mn sales. First, our Country Risk team believes that GDP growth will reaccelerate to 5.6% in FY14/15, up from 4.7% in FY13/14. Thus far, business sentiment appears to be on the mend since the election and inauguration of Prime Minister Narendra Modi and his government, which leads us to expect activity in sectors such as manufacturing, mining and construction to pick up.

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However, tempering this optimism is the fact that the government may need to start reducing the high level of subsidies on many goods, which will weigh on disposable income levels. One opposite risk is that continued high levels of subsidies could place upside pressures on price inflation in the near term, and could lead the Reserve Bank of India to tighten interest rates in order to dampen prices and would result in slower growth. Moreover, the lack of a cutback in subsidies could impair the country's longer term growth trajectory, as these subsidies would hamper resource allocation, with growth in subsidised industries coming at the expense of other more productive sectors. Against this mixed backdrop, we are targeting growth in private consumption - a...

The India Autos Report features the latest data and forecasts covering production, sales, imports and exports.

Business Monitor International (BMI)'s India Autos Report provides industry professionals and strategists, corporate analysts, auto associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on the automotives market in India.

Key Benefits

* Benchmark BMI's independent automotives industry forecasts on India to test other views - a key input for successful budgetary and planning in the Indian automotives market.
* Target business opportunities and risks in the Indian automotives sector through our reviews of latest industry trends, regulatory changes and major deals, projects and investments in India.

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