Speed bumps ahead for India's PV market

After two consecutive years of double-digit growth and hitting new volumes peak in FY23, India's passenger car market is on a course correction for FY24. Ketan Thakkar examines the possibilities.

- Ketan Thakkar

The initial euphoria following the post Covid-19 market recovery for the automotive markets seems to be subsiding now. Tell-tale signs are evident. A slowing economy, rising interest rates, high inflation and swelling vehicle prices have already dampened the demand momentum for the industry.

Even with chip supplies improving and production has been back to normal, the pent-up demand appears to have dried up and the market has come back to fundamentals of economic growth.

With the World Bank and Asian Development Bank revising the GDP growth downwards, the impact is likely to be seen in the automotive market too.

According to market leader Maruti Suzuki, the Indian market is set to grow between five and seven percent in the current financial year, having posted over 27 percent growth in the last financial year. The likes of Crisil, ICRA, ICICI Securities amongst others have forecasted the market to grow between five and eight percent.

Shashank Srivastava, Senior Executive Officer, Sales and Marketing at Maruti Suzuki says there are multiple red flags like uncertain effects of global economic trends, hardening interest rates, inflation, fears of El-Nino and its potential impact on the monsoon and drop in rural incomes.