The moment that the beleaguered auto sector had been waiting for is finally arriving

A host of new launches and those that are in the pipeline have added to the euphoria and auto sector watchers are filled with optimism about the upcoming festive season. The overall dispatches for July picked up considerably showing that the demand scenario is robust and likely to accelerate.

The growth is being witnessed almost across the board. With the economy on the rebound and commodity prices easing globally, growth is returning to not just the passenger vehicle segment but commercial vehicles as well.

The craze for owning an SUV has picked up and customers are showing interest especially in the compact SUV segment which is only getting more and more competitive with auto majors looking to corner a bigger share of the pie.

For instance, demand for the newly launched Brezza has been quite robust. The company has received more than 75,000 bookings for the car so far. Overall, the order backlog at the end of July was for 335,000 units, it said.

“Demand parameters as indicated by wholesale dispatches, enquiries, pending bookings remain strong,” said Shashank Srivastava, senior executive director (marketing and sales) at

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Even the luxury car market is hoping for a V-shaped recovery this year. Luxury car sales are expected to surpass the record numbers achieved in 2019.

“The industry has become more resilient and with the third wave of Covid not being so severe, there has been a steady revival,” Lexus India President Naveen Soni told PTI in an interaction.

Soni attributed the strong demand to change in consumer behaviour, more successful start-ups, younger affluent consumers and local production leading to a higher sense of value.

A number of fund managers are bullish on the revival of the auto sector.

Anshul Saigal of Kotak Mahindra Asset Management thinks that the tailwinds in the sector will boost the auto ancillary players and overall he thinks that the space is on the cusp of a takeoff.

“We believe that this space is going to see tailwinds going forward. If OEMs see tailwinds, it will translate down into auto ancillary players doing well, also in the same vein. We remain constructive on this space and think that this cycle is at the cusp of a takeoff.”

“Our approach to portfolio at this point of time is very pro-cyclical because we think there is cyclical recovery in the domestic economy so we like autos clearly because as I said autos are coming out of a supply constrained environment for the last two years, we have not really seen the demand buoyancy which we should have otherwise seen as the sector has not been supply constrained,” Pankaj Murarka, CIO, Renaissance Investment Managers, told ET NOW.