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Auto Industry Sales Growth: The concern of the auto industry is increasing, because this year the sales of vehicles are going to be affected. Taking an auto loan has become expensive due to the increased interest rates in the country. At the same time, due to unseasonal rains, the purchase of vehicles in rural areas has been affected. In such a situation, concern is being expressed in this financial year regarding the growth of the auto industry.
In the last financial year 2023, 2,21,50,222 units of vehicles were sold in the auto industry. Whereas in the financial year 2022, the sale of vehicles was 18,3,27,326 units. Retail sales have been 21 per cent during the last two years. Companies were expecting good growth in FY2024 as it would be the first year without covid-affected, but according to the Federation of Automobile Dealers Associations (FADA), this growth could be in single digits.
Sales affected in rural areas
Maruti Suzuki’s senior marketing and sales officer Shashank Srivastava said that the rains in March and early April can affect the sentiment in rural areas. He told PTI that it is time to harvest the crop. In such a situation, rain is not good for vehicle sales and crops.
Similarly, FADA said that due to rain and hailstorm, Rabi crop has been ruined in Central India and this has negatively affected the sales of vehicles in rural areas. Apart from this, the high interest rate has also negatively affected the auto industry and sales of vehicles have been affected.
80% share of auto loan
Shashank Srivastava said that due to the increase in the repo rate by the Reserve Bank from May 2022, the repo rate has increased from 4 percent to 6.5 percent, due to which taking an auto loan has also become expensive. Most banks have increased the interest rate from 180 basis points to 250 basis points. He said that auto loans have a share of up to 80 percent in this industry, due to which the sale is being affected due to the high cost of loans.
estimated sales
Srivastava said that the sales estimate of domestic passenger vehicle sales for FY2024 is going to be between 4.05 million to 4.1 million, which will be 5 to 7 percent more than FY2023.
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