TL;DR
India Ratings forecasts 5-8% overall automotive sales growth and 7-9% revenue growth for auto ancillaries in FY27, driven by premiumization, EV transition, and domestic demand.
India Ratings and Research (Ind-Ra) projects a steady growth trajectory for the Indian automotive sector in Fiscal Year 2027 (FY27), maintaining a neutral outlook with an anticipated overall sales volume growth of 5-8% year-on-year. The automotive ancillary sector is also forecasted to experience a robust revenue growth of 7-9%.
This growth in the ancillary segment is attributed to several structural drivers, including increasing content per vehicle due to premiumization trends, the implementation of GST 2.0 stimulating domestic original equipment manufacturer (OEM) demand, favorable global trade agreements, and the ongoing transition towards electric vehicles (EVs).
While passenger vehicle sales growth is expected to moderate to 3-5% in FY27 due to a higher base, the two-wheeler segment is projected to grow more strongly at 6-8%, with sales volumes likely to surpass pre-pandemic peaks. Commercial vehicle sales are also expected to see a 6-8% growth, supported by infrastructure spending and improved freight movement.
