Maintaining a neutral outlook for the auto sector for FY25, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has forecasted a domestic sales volume growth rate of 6%-9% during FY25 as against growth rate of 12%-14% in FY24. 

According to the report, the personal mobility segments namely passenger vehicles (PVs) and two wheelers (2Ws) would continue to grow, though at moderated rates, driven by improving consumer sentiments and higher disposable income. However it said that slower pace of infrastructure and other industrial activities in H1 FY25, amid the upcoming Lok Sabha 2024 elections along with higher base achieved over FY22-FY24, could lead to flattish sales in the commercial vehicles (CV) segment. 

Meanwhile, Shruti Saboo, Director, Corporate Ratings, Ind-Ra has noted that demand would be backed by personal consumption factors including higher disposable income, and recovery in consumer sentiments, though drying up of pent-up demand will moderate the growth rate. Also, despite continued infrastructure spending, ongoing capex and improving industrial production, CV sales could moderate due to the interruptions related to the 2024 Lok Sabha elections. Trends of premiumisation will continue, supporting sales of utility vehicles and more than 150CC motorcycles.