Indian auto industry set to expand despite a blend of optimism and challenges: FADA

The Indian auto industry, as per FADA, is set to witness a mix of challenges and opportunities in the near and long term. The sector saw moderate growth in FY24, with hopes of further expansion in FY25, especially with the launch of new electric vehicles and favorable government policies.

FADA highlighted that manufacturers are gearing up with better supply chains and new models to meet consumer demands. The focus is on overcoming challenges like high base in the passenger vehicle segment and intense competition through innovation and strategic market engagement for balanced growth. The industry aims for sustainable growth and wider reach in the evolving market conditions.

The decision of the RBI’s MPC to maintain lending rates at 6.5% will impact vehicle retail sales. With a decline in consumer sentiment among urban Indians and restrained discretionary spending, entry-level vehicle sales may face challenges. Prices surged, making buyers more price sensitive, affecting the industry, especially in the current inflationary environment.

Despite these challenges, the industry eyes opportunities for growth, backed by festive occasions and strategic product launches to revive consumer interest. The sector hopes to navigate through these hurdles and leverage strengths for sustainable growth. The industry’s fate remains intertwined with economic conditions and evolving market demands in the upcoming financial year.

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