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Auto volumes have been poor in FY14 so far
Nov 12, 2013

That the Indian economy is facing severe slowdown is there for everyone to see. And this fact is echoed by none other than the MD of Tata Motors. According to him, the economic conditions in India are very difficult. He should know. The commercial vehicles segment of the auto space, where Tata Motors is the market leader, closely tracks GDP growth. And the volume growth of this segment has been continuously declining for the past several quarters now.

As a matter of fact, the entire auto industry continues to face stiff challenges. The weak economic conditions, piling inventories and consistent losses are the main problems faced by the auto sector. Even the festive season failed to bring any cheer. Domestic passenger car sales declined by 3.9% in October this year compared to the same month of 2012. However, two-wheeler sales grew by 18% YoY in October 2013. The auto sector has witnessed de-growth of nearly 5% during the first half of 2013-14 and the recent repo rate hike may prove to be a dampener for potential customers. The industry continues to look forward to an immediate support in terms of a stimulus package to perk it up as well as bring back the growth momentum for the economy in general and the automotive sector in particular.

Business Standard, SIAM

This Chart Of The Day was published in The 5 Minute WrapUp - What do FIIs know that small investors don't?

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