- Latest sales trends and expectations from the new government are helping the automobile sector encounter demand after 2 years of a slump. Only time will tell whether these are indications of a recovery ahead or an illusion.
- Comparisons:
- Commercial Vehicles (CV) was the worst hit the previous year with Medium & Heavy Commercial Vehicles registering a shrink of about 25% in its industrial activity. But the past 2 quarters have seen a steady growth in MH&C, and is expected to grow marginally in 2014-15 with growth largely skewed in favour of H2. This may be due to the increase in freight rates that indicate absorption of excess capacity in the system.
- Drop levels in heavy-duty truck segment have reduced and a surge in the sales of tractor-trailers has been registered.
- Surplus in the trucking system, steep rise in repossession of vehicles and drop in prices of second-hand vehicles may deter the new CV demand.
- Passenger Vehicles, which was going through a slump due to inflation, fuel prices and high interest rates, are expected to see a moderate growth this year. Despite this lukewarm response, many new models were launched indicating the strong competitive nature of PV industry besides the strong medium-term growth opportunity offered by its large market.
- Rising income levels led to affluent Indians plummeting luxury car sales indicating their reduced sensitivity to inflation. Audi and Mercedes-Benz recorder best-ever quarterly volumes.
- The growth would have been higher if corporate had done well, since luxury cars from a part of the compensation of many high-performing office bearers.
- Two wheelers, motorcycles and automatic vehicles in particular, witnessed as increased demand in the rural areas.
- Read at: http://www.thehindu.com/todays-paper/tp-business/recovery-round-the-corner/article5932357.ece
Exams Perspective:
- Inflation
- Status of Automobile Sector in India