Painting a rosy picture of the passenger car industry, credit rating agency ICRA said on Monday that domestic car sales is likely to grow by eight per cent annually over the next three years to 838,000 units in 2006-07, which will be driven largely by the compact and mid-size segments.
The industry would also increase its presence as a sourcing hub for global automotive companies and auto exports from the country was likely to rise in the coming years, ICRA said in its latest report -- The Indian Automotive Industry.
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It, however, predicted that the growth rates would vary across segments, with the mini segment comprising the Maruti-800 and Omni models likely to lose marketshare while the compact and mid-size car segments would grow.
"Although the volumes in the mini segment are expected to be sustained, the share of the segment in the overall industry is likely to decline. In the medium term, growth in passenger car industry is expected to be led largely by the compact and mid-range segments," ICRA said.
It attributed this to changing price-value equation, falling interest rates and easy availability of finance.
Forecasting car sales of 666,000 units this fiscal, ICRA said the domestic utility-vehicles market has also been redefined since 1999-2000 with the success of Toyota Qualis and Mahindra Scorpio.
Besides, imported models like Mitsubishi Pajero, Honda CR-V, Ford Endeavour and Suzuki Grand Vitara have attracted car buyers with their sporty styling, comfort and advanced features.
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