The vehicle sector has registered a decline of four to seven percent due to sluggishness in passenger vehicle sales in the country. The ICRA said in its report that despite the government announcing measures, the decline and slowdown in vehicle sales in the financial year has reached a critical condition. The auto industry reported a 21.6 percent decline in sales in the first four months of the current fiscal. The industry attributed this to its inability to get loans amid concerns over the mandatory BS-4 vehicles.

In a recent case, the rating agency has reported that passenger vehicles are likely to fall in FY 2020 at 4-7 percent and medium and heavy commercial vehicles are estimated at 0.5 percent. The auto industry has been struggling hard at the beginning of the second quarter of FY 2018-19 and growth has slowed significantly. The changes resulted in rising cost of ownership, interest rate/interest. The increase in EMI, which has affected demand.

Commenting on the auto sector's outlook, ICRA Senior Group Vice President, Subrata Roy said, "In the short-term, much of the demand will depend on recovery after the monsoon, especially given the fact that many parts of the country have been flooded. Agricultural production, economic and industrial development will be in fragile. Continuing his point, he further said, "However, it remains to be seen how the demand for autos increases during the festive season and possibly before BS6 may get a little boost to the sector before the prices rise in the fourth quarter of FY20." On two-wheelers, ICRA said that from April 1, 2020, all models will depend on the introduction of BSVI, which will increase the prices of the entire auto industry.

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