Revving Up: The Sizzling Future of India's Automobile Sector

A recent report by Nuvama predicts sustained growth in India's passenger vehicle (PV) sector, suggesting the demand upcycle could last until the fiscal year 2029. Driven by GST 2.0 reforms and a bullish outlook for the automobile sector, this trend marks a significant rebound since the volume trough of FY21, exceeding previous peaks by FY23.

Currently, the PV segment is considered to be in a mid to advanced stage of its upcycle. Historical data indicates that such cycles can last between six and eight years, potentially extending the current upcycle to FY27-FY29. Broader industry projections remain optimistic, with healthy demand anticipated across two-wheelers, tractors, and PVs.

The momentum is fueled by GST cuts reaching 13%, the launch of innovative products, an anticipated pay commission for government employees, potential interest rate reductions, and ongoing income tax reforms. Automobile sales have seen an uptrend over the past 3 to 4 years, with expectations for this growth to persist, achieving new records in the coming years.

(With inputs from agencies.)