ICRA and Suzuki Motor project high growth auto market

As per ICRA, the two-wheeler industry is expected to report better demand in FY2018 (volume growth of 8-10 per cent) as against estimated growth of about 7-8 per cent in FY2017. ICRA expects demand to be driven by structural factors such as favourable demographic profile, growing middle class and urbanisation, besides moderate penetration levels. Further, exports are expected to clock growth of 8-10 per cent CAGR over the next three years with a gradual pick up from H2FY18 as key markets are showing signs of a recovery. Key players such as Hero Motocorp, Bajaj Auto and TVS Motors are expected to benefit from this growth.

On the other side, Suzuki Motor Corporation (SMC) expects India to grow into the third-biggest car market in the world and to strengthen its presence it aims to launch 15 new models by 2020. Maruti Suzuki India has already started operations at its new plant in Gujarat and plans to raise its total production to 2 million units by 2020 as against the current capacity of 1.5 million units annually. In FY18 Maruti Suzuki plans to introduce four new products.