According to India’s leading industry body, the country’s auto market recovery will soon gain pace, thanks to increased economical growth and positive consumer sentiment.
The forecast sees the positive signs adding up to a sales gain of passenger cars and utility vehicles in India by 6 to 8 percent in the year starting this April and counting as the 2016 fiscal year. “Lot of investment is expected to go into infrastructure and in rural areas, and once the money flows there will be a revival,” commented Sugato Sen, deputy director general of the Society of Indian Automobile Manufacturers (SIAM). The rising prediction for utility vehicles, cars, buses and trucks comes just in time for the government’s annual budget strategy that mulls increased investment in infrastructure, including roads and railways. According to SIAM, for the current fiscal year, the passenger vehicle deliveries in India are expected to surge with a low, single-digit following two years of back to back declines.
So far, the vehicle sales for the first eleven months of the fiscal year to end-March were up 4 percent to 2.36 million. The faster recovery could also be supported by India’s central bank surprising interest rate cut announced last week, the second for the year – mainly because the Indian market heavily relies on vehicle acquisitions delivered through bank loans. Sugato Sen pointed out “we need a kick start of the economy and that is what has come out in the budget,” with the official adding the government’s planned rural infrastructure investments would mostly spur motorcycle and affordable car growth.