ZyFin, a leading macro-analytics firm's Vehicle Purchase Sentiment Index has registered a steady growth since the downfall in April this year.
In September 2014, the index saw an increased of 2.5 points to 17.5, with decent growth in consumer willingness to purchase two and four-wheelers. This shows that a larger crowd of Indians are planning to buy a two or a four-wheeler within six months.
The sentiment index has had a strong connection with passenger vehicle sales. With the festive season clashing with the growth in sentiment, automobile sales are expected to be higher this season, as compared to the past two years.
The Vehicle Purchase Sentiment Index shows plans of vehicle purchases for the next six months. The index is based on a monthly survey of 4,000 urban consumers in 18 cities across India.
However, consumer opinions vary across cities. Among the cities, metro and Tier-II cities show higher willingness to purchase vehicles, compared to consumers in Tier-I cities.
According to the index, points improved to 22.8 in September 2014 from 17.6 in the past month for metro cities and to 20.3 from 18.5 in Tier-II cities. The score for Tier-I cities is just 8.0 in September 2014 though.
Among the 18 cities surveyed, Mumbai, Guwahati, Mangalore, Hyderabad and Indore have shown the biggest willingness to purchase automobiles.
Debopam Chaudhuri, the Chief Economist at ZyFin Research says Although the growth in Vehicle Purchase Sentiment Index suggests willingness to spend, the low score still indicates a lot of pessimism. It will take time for auto sales to reach levels seen during 2009-10.