NEW DELHI (Reuters) - India’s passenger vehicle sales are expected to grow by as much as 9 percent in fiscal 2017-18, before stabalising at a higher growth rate in the coming years, the country’s auto industry body said on Tuesday.
This year (starting April 1), demand is likley to be disrupted because of the introduction of a unified tax system and a shift to selling newer-technology, Euro IV-compliant vehicles that will push up prices, said Sugato Sen, deputy director general at the Society of Indian Automobile Manufacturers.
Going forward, Sen expects passenger vehicle sales growth to stabalise in the low double-digits.
Passenger vehicles sales rose 9.23 percent to cross 3 million units last fiscal year ending March 31, the highest in six years, SIAM data showed, as demand recovered in January after India’s “demonetisation” move late last year.
Prime Minister Narendra Modi in November declared notes of 500 rupees and 1,000 rupees illegal tender, taking about 86 percent of total currency out of circulation, in a move that hit sales of cars and two-wheelers.
Sport-utility vehicles made up about a quarter of total passenger vehicle sales last fiscal year as consumer preferences moved away from sedans to SUVs.
Reporting by Aditi Shah; Editing by Vyas Mohan