Auto sector slowdown: Tata Motors, Maruti Suzuki, Mahindra stocks fall up to 55% in one year

Automobile stocks have bore the brunt of slowdown which has gripped the sector during the last one year. Sales in auto sector have fallen in 12 of the 13 months since July 2018 signalling sharp slowdown in demand in the world's fourth-largest automobile market.

Sales of passenger vehicles to car dealers fell 30.9% to 2,00,790 units in July 2019 over July 2018 siganlling a slump in demand from consumers, data released by the Society of Indian Automobile Manufacturers (SIAM) showed. This was also the steepest since December 2000 when it had declined by 35.22 per cent. Commercial vehicles sales fell 25.7% to 56,866 units, SIAM said. Motorcycle and scooters sales fell 16.8% to about 1.51 million units, while passenger car sales fell 36% to 122,956 units, the data showed.

Also read: Auto sales record worst decline in a month in almost two decades

Data also showed that domestic passenger vehicle production was down nearly 17% in the month. Mirroring the weak consumer sentiment and slowdown in the sector, S&P BSE auto sector index fell 35% during the last one year, with home-grown Tata Motors losing 55% in the same period. NSE's Nifty Auto index too fell 36.70% during last one year.

Other auto stocks such as Maruti Suzuki (33%), Mahindra and Mahindra (46%), Ashok Leyland (50.31%) , Hero MotoCorp (19%) and TVS Motor (31.21%) have logged substantial losses during the last one year. The only exception among auto stocks was Bajaj Auto which saw a rise of 1% during the period on BSE.

Stocks of auto component manufacturers also took a hit. Motherson Sumi, the manufacturer of  automotive wiring harnesses, mirrors for passenger cars and a leading supplier of plastic components and modules to the automotive industry, saw  a 53% fall in its share price during last one year. Similarly, Minda Industries, tier-1 supplier of automotive components, too lost 23% during the last one year. Bosch, another auto component manufacturer, fell 27.56% during the period.

According to industry body SIAM, the entire auto sector is reeling under a prolonged slump, affecting vehicle sales across all segments. In July, wholesale passenger vehicle sales fell for the ninth straight month amid overall slowdown in the economy.

Retail sales of automobiles fell 6% year-on-year to 16,54,535 units in July 2019 compared to 17,59,219 units, according to data released by Federation of Automobile Dealers Associations (FADA). FADA this month said around two lakh jobs had been cut across automobile dealerships in India in the last three months as vehicle retailers take the last resort of cutting manpower to tide over the impact of the unprecedented sales slump. The two lakh job losses in the last three months are over and above the 32,000 people who lost employment when 286 showrooms were closed across 271 cities in the 18-month period ended April this year, said the body.

Edited by Aseem Thapliyal