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No bottom in sight for auto sales. February numbers say it all

March 03, 2020 / 05:27 PM IST

Highlights
- Disappointing numbers from auto majors across segments
- Slowdown, new axle load norms, tight liquidity and finance woes weigh
- Tractors grow strong but PVs and three-wheelers post mixed numbers
- Pre-buying ahead of BSVI is an important catalyst
- The Coronavirus outbreak may impact the supply chain
- Upcoming quarters are expected to be more challenging --------------------------------------------------

The automobile sector, especially the commercial vehicle (CV) segment, is running downhill fast. There appears to be no relief in sight, given the weak macro environment and a strong regulatory framework.

Any pre-buying ahead of the BS VI implementation is a critical catalyst for the growth of the sector in the March quarter of 2019-20. The next financial year will be no less challenging for companies as the cost of ownership is expected to rise after the new emission regime kicks in, which may impact demand further.

Higher reservoir levels, adequate soil moisture and a good Rabi crop are expected to strengthen demand for tractors and two-wheelers (2W) in the next few months.