PINC Research has come out with its report on auto sector. The research firm has maintained neutral rating on the sector.
Finance, Fuel cost, Strike.... Indian automotive industry continues to witness soft demand emanating from high fuel cost and increase in interest rates. The passenger car industry has been the worst impacted by this and reported their worst performance over the last 30 months. Beside the slow demand, the industry was also besieged by employee strike at Maruti Suzuki’s Manesar plant. In this gloom, 2-wheeler segment maintained their outperformance with strong double digit growth. The prime factors behind strong performance of 2-wheeler segment is their low dependence on financing and lower operational cost. The surprise during the month was growth in medium and heavy commercial vehicle (MHCV) segment despite their high dependence on financing and weak freight market owing to monsoon.”
“We expect MHCV segment sales to see a decline over next 3 months due to increase in diesel price announced in June 2011. Moreover, last year the segment was doing very well due to recovery in the economy and impending emission norm changes.”
