Passenger vehicle sales likely to grow 1-4% this fiscal: ICRA

Citing dealers apex industry, Federation of Automobile Dealers Association (FADA), ICRA said inventory levels inched up to 55 days by the end of July.
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KRISHNAN VV

The domestic passenger vehicle industry is estimated to log a 1-4 per cent growth in the wholesale volume this fiscal year, with the growth in the first four months (April-July) contracting by 1.1 per cent, ratings agency ICRA said on Friday.

This estimated modest growth is based on concerns over elevated inventory levels and a high base, ICRA said.

However, steady model launches by OEMs (Original Equipment makes) and potential GST rate cuts are expected to support demand in select segments, it said.

The central government has proposed reforms in Goods and Services Taxes (GST) by reducing the number of slabs from the current four — 5,12,18, and 28 per cent to just 2 two– 5 and 18 per cent.

Major automobile makers in the country are set to publish their August sales numbers on Monday (September 1). In July, ICRA said, wholesale sales grew 8.9 per cent sequentially as OEMs built up inventory ahead of the festive season, though volumes remained flat on a year-on-year basis at 3.4 lakh units.

Retail sales also improved sequentially by 10.4 per cent, but were marginally lower by 0.8 per cent year-on-year, it said.

It also said that SUVs continued to dominate, contributing 65-66 per cent of the overall passenger vehicle (PV) volumes, with utility vehicles expected to remain the key growth drivers in the near term.

Citing dealers apex industry, Federation of Automobile Dealers Association (FADA), ICRA said inventory levels inched up to 55 days by the end of July.

Besides, exports recorded a 9 per cent year-on-year increase in July, albeit on a low base, led by Maruti Suzuki India, followed by Hyundai Motor India, ICRA stated.

Published on August 29, 2025