With the small car segment driving growth, the country's domestic passenger vehicle market is likely to grow at a compounded annual growth rate (CAGR) of 13.9 per cent over the next five-years, a survey said.

"The domestic passenger vehicle sales will accelerate at a CAGR of 13.9 per cent from 1.55-million units in FY 09 to 2.98-million units in FY 14," a Credit Analysis and Research (CARE) Ratings survey said.

According to the survey, the small car segment is likely to clock a CAGR of 15.8 per cent from 0.94-million units in FY 09 to 1.95-million by end-FY 14.

There will be an increase in preference for utility vehicles for personal use which would drive the segment's growth, it said. Lower excise duty of 8 per cent on small cars (mini- and-compact) as against 20 per cent for big cars would largely contribute to the higher growth of small cars, the survey said.

The mini-segment sales will grow at a CAGR of 40 per cent from 49,383 units in FY 09 to 2,65,803 units by the end of FY 14.

However, the compact segment sales will rise at a CAGR of 13.7 per cent from 8,88,676 units in FY 09 to 16,80,349 units in FY 14, it said. Around 5.5-million households (70.3 per cent of the addressable households) can afford a car with on-road price not exceeding Rs 3,50,000 (FY 09 prices).

Acording to the survey around 5.5-million households (70.3 per cent of the addressable households) can afford to own a car with on-road price not exceeding Rs 3,50,000 (FY 09 prices).

This segment can afford a small car, it said. On account of income increasing fast among the lower mid-income masses, around 7.2 per cent or approximately 16.8- million households of the total projected 232.6-million households are expected to afford a car in FY 14, it said.

Passenger vehicle exports are likely to grow at a CAGR of 22 per cent from 3,35,739 units in FY 09 to 9,09,000 units by the end-FY 14.

Passenger car exports will accelerate at a CAGR of 22.1 per cent from 3,31,539 units in FY 09 to 9,00,000 units in FY 14, fuelled by small car exports, the survey said.