Decline in China auto sales adds to woes of Indian firms

Car producers in China are facing the brunt of trade war tension between the two biggest economies of the world. Car sales in China slipped 2.8 per cent in 2018 due to a slowdown in the economy resulting in sluggish demand.

Industry experts believe that this scenario is likely to continue in the ongoing calendar year. Also 
China's top auto industry association expects the country to sell 28 million vehicles in 2019, this translates to flat growth compared to 2018.

China is the biggest auto market in the world and accounts for almost 20 per cent of the world car demand. Consequently, flat growth in the world’s major market is likely to have adverse impact on India’s Tata Motors which owns luxury brand Jaguar and Land Rover. Resultant, major auto components supplier such as Motherson Sumi is also likely to go through a bumpy ride in the current year. 

The stock of Tata Motors in the last one year has eroded nearly 56 per cent of investors’ wealth as it went down from Rs. 422 apiece in January 2018 to present Rs. 185 apiece. During the same period, the stock of Motherson Sumi has corrected almost 36 per cent.