The auto sector has been in a downward spiral for some time now. Consumers are deferring their purchases in anticipation of GST revision and steep discounting ahead of the BS VI rollout, affecting demand. While all segments reported a y-o-y decline in monthly volume, the passenger vehicle (PV) and commercial vehicle (CV) segments witnessed the highest decline.
The government has implemented various initiatives to ease the liquidity crunch, though the measures are unlikely to provide any immediate respite to the industry. Going forward, we expect the slowdown to continue, as rural demand is yet to pick up pace due to the liquidity crisis in the non-banking financial company (NBFC) space, while several rural markets are impacted by excess rainfall, which has created a temporary disruption.
Demand environment and changing competitive landscape in the auto sector would be the key determinants of stock performance with further positive momentum expected on the back of the upcoming government initiatives for a much-needed respite to the automobile industry.
This edition of Auto Track will provide deep insights into the auto industry, covering its performance during July-September 2019 along with the latest regulatory updates and leading stories of the quarter.