Tuesday morning witnessed a steep fall in the sales of Automobile stock as the Sensex slipped 0.7% at 15,660, as compared to 0.93% decline in the BSE Sensex. Immense selling pressure faced by the shares of automobile companies as the trade fell 2% to 5%. Data suggested the sales of two-wheelers and four-wheelers almost halved in the month of August in comparison to the equivalent month the previous year.
Individually, Maruti Suzuki’s stock showed a drop of 2%, M&M (Mahindra & Mahindra) and Eicher Motors slipped by 3% each, and Tata Motors depreciated 5%. On the opposite end, Hero MotoCorp saw a rise of 1.9% even though the company reported around 21% year-on-year dip in sales to 543,406 units.
Sales data from the top six car makers of India that make up more than 90% share of the market displayed the slump in the sales for passenger vehicles slumped 34% in comparison to the sales recorded the previous year. Data from M&M and Tata Motors that account to about two-third of the business based vehicle market showed a 40% fall in the sale of trucks, an economic activity indicator.
According to the Business Standard report, the industry is expecting the latest initiatives taken by the administration to upraise liquidity in the economy, which will display results from the ongoing month. Lately, the finance ministry declared the measures to be taken that includes policy certainty over Bharat Stage VI transportations and merging public sector banks.
“It is not just a lack of buyer interest but a loop of negative sentiment with automakers cutting jobs and production,”
-Puneet Gupta, associate director, IHS Markit
The experts have, however, not been optimistic when it comes to the effect of the crisis. Analyst IHS Markit, a global information provider, declared in its 2019 growth forecast for India, an expected car sales fall to around 11%.
At an early morning hour today, the S&P BSE Auto Index was down 0.7% or 109 points at 15,660, as compared to 0.93% decline in the S&P BSE Sensex.