According to figures from the Society of Indian Automobile Manufacturers (SIAM), domestic auto sales (sum total of passenger vehicle and commercial vehicle sales) rose 11.7% year-on-year (y-o-y) in December 2014 to 260,025 units, in line with the broad recovery in the sector since the arrival of India's new Prime Minister Narendra Modi.
However, this quarter BMI has become slightly more cautious on the near-term outlook for Indian auto sales. This reflects two factors: first, the fact that sales growth has become increasingly volatile over recent months and secondly, the government's decision to rollback excise duty cuts introduced in 2013/14, when the local auto industry was struggling. As such, we have tempered our sales forecasts for FY2014/15 (April-March), now targeting 2.2% growth for the fiscal year.
With economic growth gathering pace on the back of Modi's ongoing reform drive, consumer sentiment has inevitably picked up. Passenger vehicle sales (sum total of passenger car, utility vehicle and van sales) have been on an uptrend since April 2014 and grew by 12.4% y-o-y in December 2014 to reach 209,025 units.
However, the recent rollback of the tax breaks offered to the auto sector when it was struggling in FY2013/14 will hurt demand over the coming months, in our view. The excise taxes for small cars, motorcycles, trucks and buses will be increased to 12% from 8% previously, while the levy on sport utility vehicles (SUVs) has increased to 30% from 24%. Taxes on mid-size and large cars will rise to 24% from 20% and to 27% from 24%, respectively. We have therefore downgraded our passenger vehicle sales growth forecast for FY2014/15 to 4.0% from 8.0% previously.
Moreover, despite the significant improvement seen in commercial vehicle (CV) sales in recent months, we believe that they will still end FY2014/15 in negative territory due to their poor start at the beginning of the fiscal year. As such, we are maintaining our full fiscal year forecast of a 5.0%...
The India Autos Report features the latest data and forecasts covering production, sales, imports and exports.
BMI Research'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.
- 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.
- Assess the activities and market position of your competitors, partners and clients via our Competitive Landscape Analysis.
BMI Industry View
Summary of BMI’s key industry forecasts and views, covering production, sales and the introduction of new technology or products.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the autos sector and within the broader political, economic and business environment.
BMI Industry Forecasts
Historic data series and forecasts to end- 2019 for all key industry indicators (see list below), supported by explicit assumptions plus analysis of key downside risks to the main forecast, including:
Sales and production of motorcycles in units; total production of units; production by vehicle type (including cars, commercial vehicles, trucks and buses); total vehicle fleet size in units; sales by vehicle type, including passenger cars and commercial vehicles; fleet size by vehicle type, including passenger car, commercial vehicles and motorcycles; total vehicle trade balance in units; vehicle trade balance by vehicle type, including passenger car, commercial vehicle and motorcycle; car ownership measured as car density per 1,000 people.
BMI’s Autos Risk Reward Index
BMI’s Risk Reward Index provides investors (manufacturers, suppliers and dealers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points. These provide indices of highest to lowest appeal to investors, with each indices explained.
BMI Economic Forecasts
BMI forecasts to end-2019 for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt.
Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI’s industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.
Global, Regional and Country Industry Overviews
In-depth analysis of the major global and regional developments in the market, which can be linked with the country industry overview, providing cross-country investment, product and financing trends that will affect each market, supported by BMI’s global and regional industry forecasts.
The Autos reports draw on an extensive network of primary sources, such as manufacturing associations, statistical bureaus, government transport ministries, national chambers of commerce and industry, national statistical offices, government ministries and central banks and multinational companies.
*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.