D&B – Sectoral Outlook 2017 – Automobiles

Healthy economic growth to sustain demand for automobiles in 2017; outlook on sales remains positive across vehicle categories…..

D&B – Automobiles – Sectoral Outlook 2017

In the year 2016, growth in domestic sales of automobiles saw resurgence, after the subdued performance in 2015. Automobile sales recorded y-o-y growth of 9.2% in 2016, driven by revival in two-wheeler segment, sales of which grew by 9.6% (0.7% growth in 2015). At the same time, growth in sales of passenger vehicles (7.0%) and commercial vehicles (7.8%) was also healthy. Improvement in economic growth, robust demand from the rural and semi-urban markets and lower cost of ownership drove sales during the year gone by. 2016 has been a recovery year for the automobiles industry, after growth slumped in the preceding year. The growth story of the automobiles industry is expected to continue into 2017 across all vehicle categories, viz. commercial vehicles, passenger vehicles, and two & three wheelers.

Key Highlights of the report as below:

  • Key factors to drive demand for vehicles across categories
  • Recovery in economic activity
  • A favourable monsoon which will positively impact rural income and eventually help consumption to grow
  • Implementation of the 7th Pay Commission awards
  • Lower cost of ownership due to benign fuel costs and lower interest rates
  • Higher replacement demand on account of the expected implementation of new emission norms
  • Impact of deferred purchases as a result of demonetisation
  • Under-penetrated markets, particularly rural and semi-urban markets.
  • Expected increase in discretionary spending to aid higher sales of passenger vehicles
  • Demand outlook for commercial vehicles remains positive due to favourable outlook on economic growth and infrastructure push
  • Demand from rural and semi-urban markets to strongly support higher sales of two wheelers
  • Growth in vehicle exports to remain muted

Find the detailed report attached.

DB- Automobiles -Sectoral Outlook 2017