- 26 Jun 2024
- ICICIdirect Research
Media articles suggest healthy capacity additions by domestic players
M&M - 2757 Change: 24.75 (0.91 %)News: As per media sources, domestic passenger vehicle industry is adding nearly 3 million units per annum of capacity on an existing base of ~6 million units per annum, thereby aiming for ~9 million units of capacity by FY30/31.
View: In our view domestic passenger Vehicle industry has levers for growth longevity amidst low car penetration as well as rise in income levels. At the industry level, long term growth CAGR is expected at ~6-7% with industry slated to clock ~6 million units per annum of domestic sales by FY30 (vs. ~4.2 million clocked in FY24). Most of the capacity expansion plans at OEM’s are in public domain with aggressive expansions being currently executed by Maruti Suzuki and Mahindra & Mahindra. Our top bets in this space are M&M followed by Tata Motors.
Impact: Positive