High-interest rates make auto industry cautious about growth prospects

Unseasonal rains impacting rural demand, high-interest rates on auto loans and increased costs due to new regulatory norms are making the automotive industry cautious about the growth prospects in the current fiscal.

The industry --- which witnessed the first full year without any impact of COVID-19 in FY23 after a gap of two years with double-digit growth of 21 per cent in overall retail sales -- is now set to clock tapered growth in the low single-digit due to a high base, according to the Federation of Automobile Dealers Associations (FADA).

As per data shared by the dealers' body, the total domestic vehicle retail sales stood at 2,21,50,222 units in FY23 against 18,3,27,326 units in FY22.

Maruti Suzuki India Senior Executive Officer, Marketing and Sales, Shashank Srivastava said the unseasonal rains in March and early April could have a dampening effect on the sentiment in the rural areas.

"Because this is the harvest time and these rains are not so good (for the rural sales),"