The auto sector’s fortunes are unlikely to improve dramatically in FY17. While the outlook for the auto and auto ancillary sector is stable, volume growth would continue to languish in single digits.
According to a report by India Ratings & Research, the passenger vehicle segment is likely to post domestic volume growth of six to nine per cent year-on-year in FY17, driven primarily by the car segment (8-10 per cent) with lower sales volume growth to be exhibited by utility vehicles (2-5 per cent). Lower cost of ownership would be the key growth driver for the sector in the new fiscal. In the face of a regulatory issues faced by the diesel vehicles, consumers may favour petrol vehicles over diesel, considering the low price of petrol variants and fall in fuel cost