News and Events

In light of disappointing festive season sales and inventory stockpiling with dealers, ratings agency CRISIL cut down its growth forecast for the Indian passenger vehicles industry by a hefty 200 basis points (2%). Diwali and Dussehra, which normally account for a fifth of the annual automobile sales, saw a muted consumer response this year. As per CRISIL data, vehicle sales de-grew by 2% during the September-October period. Meanwhile, the fiscal-to-date (April-October) growth was at just 6%. Consequently, the ratings agency has recalibrated its sales growth forecast for the passenger vehicles industry from 9-11% to 7-9%. In its report, CRISIL noted that the waiting period for popular models has come down to just a couple of weeks. At the same time, the market is starving for new product launches. Existing model face-lifts are outnumbering new model launches. The report quoted only six new model launches in the past 10 quarters against 15 facelifts during the same period. Dealer inventory post Diwali stood at around 40 days, unlike 30-35 days in the festival seasons of the past couple of years. The factors attributed to the lackluster sales in these past few months were a sharp rise in fuel prices, rising interest rates, and an increase in insurance premiums – all of which increased the cost of vehicle ownership - and the lack of new model launches.