The Indian auto sector is poised for acceleration, with innovators earnings the lion's share of growth, according to Deepak Shenoy, chief executive officer of Capitalmind Mutual Fund.
A general recovery in sales volumes have been particularly driven by higher disposable income due to revised tax slabs. The players who consistently redefine their offerings are set to capture the largest share of the upcoming demand, Shenoy said, during a televised interaction with NDTV Profit on Tuesday.
"With higher income from salaries on a taxable basis, there is a slightly higher amount of people who are able to buy cars now. So hopefully, we'll see some increase in volumes by the end of this year," Shenoy noted.
He added that the market is keenly awaiting a meaningful reduction in interest rates, which could trigger another wave of sales, possibly around the Diwali festive season. India remains remarkably underpenetrated in the four-wheeler segment, he said.
Lion's Share In Growth For Innovators
There is a shift away from diesel vehicles which was a significant contributor to growth. There is also a notable transition from two-wheelers to cars, influenced by factors like road conditions, weather, and increasing car affordability. This is particularly evident in the rising sales of entry-level SUVs and cars. Manufacturers who are investing in innovation and incorporating more features are gaining a decisive edge.
"Some players have innovated and got more features in their cars, especially those from the German manufacturers. Some of the players in the two-wheeler space have also innovated that way. So people who are innovating will get a lion's share of growth," Shenoy said.
Shenoy emphasised that new launches, especially those with better features, lead to substantial increases in bookings, citing examples like the XUV and other recent releases.
"There is great demand for good features and to provide them at a good price point, leaders seem to be showing the way," he said.
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