While recent structural changes in India's tax regime may offer long-term economic benefits, their nearterm impact on auto demand appears limited. Given the constrained pool of direct taxpayers, most of whom either fall below the taxable threshold or contribute modestly, a meaningful revival in the entry level segment is expected to be gradual, reflecting the underlying income distribution challenges.
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DRChoksey Report
Auto industry sales in Q4 FY25E exhibited a mixed trend. January recorded healthy traction, supported by beginning-of-year momentum and ongoing promotional schemes. However, demand gradually tapered in February and is expected to remain muted in March, with no major catalysts to drive retail acceleration.
Some OEMs may benefit from regional festivities such as Holi and Gudi Padwa, which could provide marginal support to volumes in select markets. Nonetheless, these are unlikely to offset the broader softness in demand.
Overall, industry growth for the Q4 FY25E is expected to remain subdued, with limited retail enthusiasm and a lack of strong seasonality affecting volume momentum. Dealer sentiment turned cautious during Q4FY25E, with increasing reluctance toward inventory buildup amid slowing retail demand and recent OEM price hikes, which further weighed on consumer sentiment. The domestic demand environment remained under pressure, adversely impacting overall industry growth.
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