India Ratings & Research Agency has rated major players in the industry taking into account that the past year has seen lower than expected sales. This has resulted in the agency revising their outlook to stable to negative from stable.
According to estimates, the agency expects the commercial vehicle segment to post 6-9% decline in domestic volumes YoY, due to decline in operating margins as road freight rates have not been increased with corresponding increases in diesel prices.
The agency also estimates that passenger vehicles, utility vehicles and multipurpose vehicles will see a decline of 3-8% in FY 15 due to reduced affordability and rising cost of ownership. On the other hand demand in rural areas is slated to see a marked improvement, following favorable weather conditions all across the country. Post general elections in 2014 however, could see an improvement where both commercial and passenger vehicles are concerned and this improvement could be about 1-4% and 2-4% respectively.