Passenger vehicle firms to invest 65,000 cr by FY25 to raise capacity: Report

Passenger vehicle makers are expected to invest around 65,000 crore by FY25 to ramp up production capacities to cater to enhanced demand, rating agency ICRA said on Monday.

By: PTI
| Updated on: 28 Nov 2022, 16:14 PM
Follow us on:
Follow us on:
File photo used for representational purpose only (Bloomberg)
File photo used for representational purpose only (Bloomberg)
File photo used for representational purpose only (Bloomberg)
File photo used for representational purpose only

It stated that the demand for passenger vehicles has remained healthy since the turn of the calendar year, aided by strong underlying demand and an easing up of semiconductor shortages.

The passenger vehicle industry wholesale volumes are expected to touch an all-time high of 3.7-3.8 million units in FY23, a growth of 21-24 per cent over the previous fiscal, driven by robust demand, it added.

Trending Cars

Find more Cars

Also Read : Indians bought nearly twice as many vehicles in October than festive month in 2021

With ease in supply chain constraints and semiconductor shortage, capacity utilisation of the OEMs (Original Equipment Manufacturers) improved to healthy levels over the past few quarters -- factoring in a continuation of strong demand sentiments, the OEMs have now revved up their capacity expansion plans, ICRA said.

"With the OEMs also budgeting for a substantial outlay towards new product development, including the development of capabilities/dedicated platforms for electric vehicles, the aggregate capex outlay for the OEMs is estimated to remain heightened at 650 billion over FY2023-FY2025," ICRA Vice President & Sector Head - Corporate Ratings - Rohan Kanwar Gupta stated.

Multiple OEMs have already announced an aggregate outlay in excess of 250 billion towards capacity expansion for the next few fiscals, he added.

While adding new capacities will marginally moderate the capacity utilisation levels over the next few years, given the healthy demand environment, the utilisation is likely to remain at comfortable levels at around 70 per cent, Gupta noted.

While the capex outlay is likely to increase significantly, a majority of it will be met through healthy cash accruals and parent funding support, apart from inorganic fundraising in some of the recently formed EV subsidiaries, ICRA noted.

First Published Date: 28 Nov 2022, 16:10 PM IST
Recommended for you
View all
NEXT ARTICLE BEGINS
Shopping Bag Shop Now
55% OFF
SOFTSPUN Microfiber Cloth - 4 pcs - 40x40 cms - 340 GSM Grey- Thick Lint & Streak-Free Multipurpose Cloths - Automotive Microfibre Towels for Car Bike Cleaning Polishing Washing & Detailing
Rs. 269 Rs. 604
73% OFF
pTron Bullet Pro 36W PD Quick Charger, 3 Port Fast Car Charger Adapter - Compatible with All Smartphones & Tablets (Black)
Rs. 349 Rs. 1,299
20% OFF
Involve Your Senses One Musk Organic Car Perfume Bar, Involve Your Senses Strong Fiber Air Freshener to Freshen'up Your Car - IONE01-40 g Car Accessories interior car perfumes and fresheners
Rs. 320 Rs. 399
65% OFF
ELV Car Mount Adjustable Car Phone Holder Universal Long Arm, Windshield for Smartphones - Black
Rs. 349 Rs. 999
14% OFF
Jopasu Car Duster
Rs. 749 Rs. 869
9% OFF
ShineXPro Microfiber Car Cleaning Cloth - OG Soft 500 GSM Extra Large (35x75 cm) Microfiber Cloth for Car and Bike - Suede Edging for Scratchless Drying and Detailing (Pack of 2)
Rs. 499 Rs. 549
7% OFF
Pidilite WD-40, Multipurpose Car care Spray, 420ml Rust Remover, Lubricant, Stain Remover, Powerful Chimney Cleaner, Degreaser, and Bike Chain Cleaner & Chain Lube (341g)
Rs. 347 Rs. 375
68% OFF
ORJILO Super Soft Microfiber Car Duster Exterior with Extendable Handle, Car Brush Duster for Car Cleaning Dusting - Grey
Rs. 319 Rs. 999
65% OFF
Portronics AUTO 12 in-Car Bluetooth Receiver for Handsfree Calling, Music System, Supports All Smartphones (Black)
Rs. 529 Rs. 1,499
28% OFF
Pidilite WD 40, 170 G Multipurpose Spray for Auto Maintenance, Rust Remover, Lubricant, Loosens Stuck & Rust Parts, Removes Stain & Sticky Residue, Descaling, All purpose Protectant & Cleaning Agent
Rs. 166 Rs. 230

Please provide your details to get Personalized Offers on

Choose city
+91 | Choose city
Choose city
Choose city
By clicking "View Offers" you Agree to our Terms and Privacy Policy

Dear Name

Please verify your mobile number.

+91 | Choose city