FY14 is a year that the Indian auto industry would clearly like to forget. Other than two-wheelers which managed to record some growth, the rest of the segments saw volumes declining. Given the slowdown in the economy, high inflation and firm interest rates, demand for passenger vehicles (PVs) remained tepid. The fall in volumes was much steeper for commercial vehicles (CVs) as industrial and construction activity remained sluggish leading to lower freight rates. Whether FY15 will turn out to be a better year will depend on what measures the new government announces to bolster growth. From a longer term perspective, growth for automobiles is very much there. But once the uncertainty surrounding the elections dies down and a new government comes into power, perhaps we will see the demand getting unleashed.
*Passenger vehicles, **Commercial vehicles
Data Source: SIAM