Never Ending Woes For The Automobile Sector - Chart Of The Day 13 June 2019 - Equitymaster
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Never Ending Woes For The Automobile Sector
Jun 13, 2019


The Indian auto sector is in the middle of a storm.

Passenger sales fell 20.5% in May 2019 compared to May 2018. This follows a 17.1% year on year decline in April as well.

The decline in May is the worst seen since 2001.

Multiple factors have affected the auto sector of late.

The liquidity crisis faced by NBFCs, regulatory changes leading to increased costs, new emission norms... they have all taken their toll.

Also, this sector is ripe for disruption with electric vehicles and ride sharing applications.

Maruti, India's largest car maker announced it would stop making diesel cars from April next year.

The coming one year will be a real test for India's auto companies.

It will also tell us if this slowdown is temporary or if there has been a structural change in the sector.

There is one thing I know for sure, dear reader. Only the ones adapting their business models to the rapidly changing environment will survive and thrive.

Data Source: Ace Equity

This Chart Of The Day was published in The 5 Minute WrapUp - 7 Stocks That Will Remain Evergreen in this Era of Technological Disruption

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