Automobile Sector Monthly Update – May 2013
Slowdown continues
Domestic automakers continued with their poor run in May 2013, broadly on the expected line, due to slowdown in economic activity and negative consumer sentiments. The slowdown continues to be prominent in the medium and heavy commercial vehicle (MHCV), passenger car and two-wheeler segments. The utility vehicle (UV) and light commercial vehicle (LCV) segments, which so far had remained insulated from the slowdown, too have started witnessing demand pressures. Going ahead, we expect volume growth to remain sluggish in 1HFY2014 due to high inventory levels and weak consumer sentiments. Nonetheless, we expect volumes to recover in 2HFY2014 on the back of further easing of interest rates, festival demand and also due to favorable base effect.
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