PV sales will see 3-5% growth in FY25
Industry benefitted from lower interest rates and an increased desire for personal mobility in the wake of the pandemic, says CareEdge Report
Mumbai: Passenger vehicle sales is projected to grow at a moderate 3-5 per cent this financial year on account of a high-base effect of FY24, shrinking order book and subdued demand for entry-level variants, a report said on Monday.
According to the report by credit ratings agency CareEdge, following robust growth of 90 per cent with volumes at 90,432 units in FY24, with an improving penetration rate, electric car sales in the passenger vehicle (PV) segment is likely to clock volume of around 1.30-1.50 lakh units in FY25. In FY22 and FY23, the PV industry experienced substantial year-on-year volume growth due to pent-up demand post-Covid recovery and new product introductions, it said. Utility vehicles played a significant role, with volumes increasing by 41 per cent in FY22 and 33.2 per cent in FY23.
The industry benefitted from lower interest rates and an increased desire for personal mobility in the wake of the pandemic, CareEdge said. According to CareEdge, utility vehicles contributed 10-15 per cent of total passenger vehicle sales until FY12. It grew at a compound annual growth rate (CAGR) of 15.51 per cent between FY13 and FY24, as consumer preference shifted towards utility vehicles that offered better and innovative designs, new models, technological, functional and safety features. For the past decade, the utility vehicles segment has consistently outperformed the passenger vehicle industry growth rate. In FY24, for the first time utility vehicles sales volume stood higher than passenger cars and vans, it said. Currently, utility vehicles account for over 55 per cent of all new PV sales and its share in overall passenger vehicle (PV) sales is expected to further rise over the medium-term, CareEdge said.
"The PV industry is expected to exhibit moderate volume growth of around 3-5 per cent in FY25 on account of a high-base effect of FY24, shrinking orderbook and expectation of persistently subdued demand for entry-level variants in FY25," said Arti Roy, Associate Director at CareEdge Ratings.