Auto sales numbers lack power for quick pick-up

The January month auto sales number continued the negative trend from the last few months to hamper investors sentiments. The sales number across the board lost steam as NBFCs faced liquidity crunch.

Auto companies experience selling pressure on account of subdued sales numbers. The main reason for this is supposed to be tough market condition, higher interest rates, price hikes, less credit facilities and consumer sentiment. The uncertainty in the market due to elections also added to the worries of this sector.

Leading automakers Maruti Suzuki and Mahindra & Mahindra saw just 1 per cent growth on YoY basis, while Tata Motors suffered higher losses in demand and saw a 11 per cent drop in sales in January. The only company to post strong numbers was Honda with a 23 per cent rise in sales on YoY basis.

Commercial vehicle segment too had a tough times. This segment faced hard time on account of uncertainty over implementation of revised axle load norms, slowing industrial output etc. Medium and heavy commercial vehicles saw 9 per cent decline in sales.

Going ahead, the industry may continue to face slump. Though, there are no signs of revival, yet the budget announcements such as tax slab changes, farm package etc are expected to help demand as well as market sentiments.