Auto companies witnessed a slowdown at the beginning of the festive season with passenger car sales falling for the third consecutive month in September. Flood hit Onam festivities in Kerala, and the relentless surge in oil prices have hurt demand.
Dealers had piled up inventory to see them through 40-45 days but demand revival appears unlikely as we move towards Diwali because of higher loan rates, and a surge in petrol and diesel prices. The Supreme Court mandate to improve insurance coverage is another dampener, as buyers will have to pay more to get cover for three or five years instead of an annual cover.
Bajaj Auto, Maruti Suzuki India, TVS Motor Company, Escorts and Tata Motors have fallen below their respective 52-week lows. The industry is now counting on discounts and new launches to boost consumer sentiment.