CRISIL Ratings has revised its volume growth forecast for passenger vehicles downwards to 7-9 per cent (from earlier forecast of 9-11 per cent) for the current financial year (FY19), Business Standard has reported.
It attributed the downgrade to muted consumer demand and higher inventory stock with the companies. “Dusshera and Diwali period (September and October/November), which typically contributes a fifth of annual sales, haven't exactly sparkled for automobile makers or original equipment manufacturers (OEMs).”
It was earlier reported that festive auto sales for 2018 were the lowest in the past five years. Higher upfront insurance costs due to the latest Supreme Court judgement, rising oil prices and depreciating rupee contributed to the sluggish growth.
“Consequently, we are trimming 200 basis points from our earlier growth forecast of 9-11 per cent for the passenger vehicles industry to 7-9 per cent,” the CRISIL report added.
However, the commercial vehicle segment, which includes heavy-duty vehicles like buses and trucks, recorded its double-digit growth rate for the twelfth consecutive month. The sales grew by 25 per cent in October over the same period last year.