ZyFin Research's Vehicle Purchase Sentiment Index has registered a steady uptrend since bottoming out in April this year. In September 2014, the index increased by 2.5 points to 17.5, with moderate upticks in consumer willingness to purchase both two- and four-wheelers. This signifies that a larger number of Indian consumers are planning to purchase a two- or four-wheelers within the next six months. Historically, the sentiment index has had a strong correlation with actual sales of passenger vehicles. With the festive season coinciding with the uptrend in sentiment, auto sales are expected to be better this season, as compared to 2012 or 2013.

The Vehicle Purchase Sentiment Index reflects plans to purchase vehicles over the next six months. It is based on a monthly survey of 4,000 consumers in 18 cities across India, representing urban consumers. A score above 50 reflects optimism, while below 50 is an indication of pessimism.

The ZyFin Vehicle Purchase Sentiment Index has registered a score of 17.5 in September 2014, as compared to 15.0 in the previous month. With willingness to spend improving, passenger vehicle sales are expected to pick up over the next six months, the bulk of which should happen during the festive season.

However, consumer opinion varies significantly across cities. Among the tiers, metro and Tier-II cities show a markedly higher willingness to purchase vehicles than consumers in Tier-I cities. The index improved to 22.8 in September 2014 from 17.6 in the previous month for metro cities and to 20.3 from 18.5 in Tier-II cities. However, the score for Tier-I cities is just 8.0 in September 2014, having fallen from 8.9 in the previous month.

Of the 18 cities surveyed, Mumbai, Guwahati, Mangalore, Hyderabad and Indore have the strongest willingness to purchase vehicles.

Giving his views on the ZyFin Vehicle Purchase Sentiment Index numbers for the month of September, Debopam Chaudhuri, chief economist, ZyFin Research, said, ''Although the uptrend in Vehicle Purchase Sentiment Index suggests recovering willingness to spend, the low score still indicates a lot of pessimism. It would take some more time for auto sales to reach levels witnessed during 2009-10. However, for now, we can expect some moderate uptick in sales growth, especially during the festive season.''