Nifty Auto index rose up to 1% on December 1 ahead of the release of wholesale sales numbers for November. Most automobile companies are expected to report a robust growth in sales across segments on the back of lower goods and services tax rates, reduction in interest rates, strong rural demand during festive season.
In early morning trade, Nifty Auto's 12 of the 15 constituents were trading in the green. Bajaj Auto rose nearly 1% after the company reported an 8% on-year rise in its total sales in November to 4,53,273 units, on the back of a 19% year-on-year increase in exports and a 3% rise in domestic sales.
Mahindra & Mahindra said on December 1 sales of its sports utility vehicles (SUV) to dealers rose 22% in November from a year earlier, driven by continued demand boost from tax cuts.
In September, India cut the goods and services tax on SUVs with engines over 1500 cc capacity to 40% from about 50%, aiming to spur consumer spending and bolster growth amid challenges from steep U.S. tariffs.
Around 80% of Mahindra's SUVs have engines over 1500 cc.
Market leader Maruti Suzuki, along with Hyundai India and Tata Motors are yet to report their sales figures.
Mahindra, which launched a seven-seater electric SUV last week, sold 56,336 SUVs in November.
Nifty Auto index saw partial profit booking as it was trading 0.5% higher at 11:20 am on December 1 with TVS Motor, Hero MotoCorp leading gains by rising over 2% each.
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