Stocks in many Auto companies are reeling under pressure after reports that the two wheeler auto manufacturers are set to cut production. The inventories levels with 2-wheeler manufactures are reportedly high, which is compelling them to reduce production to rationalize inventory at the dealer level.
sales for the whole industry between April – February, 2018 has been in single
digits of below 7% growth as against to 14% growth, on year-on-year basis. Therefore,
sales decelerating coupled with, higher insurance costs and low retail demand
has forced two-wheeler makers to cut production.
major auto companies such as Hero, Honda and Royal Enfield will be cutting
production from March up until May by 15 percent. However, Baja Auto is stated
that it will not cut production.
the NSE’s Nifty Auto Index was down 0.78% at 8,559.60, with Hero MotoCorp
(-down 2.06%), Eicher Motors (-2.19%) and TVS Motors which falls 2.77% during
mid-market session. Except Tata Motors, all the components in the Nifty auto
index are trading in the red.
Meantime, The BSE benchmark Sensex was trading 56-points,
higher to 38,150-mark and the NSE Nifty advanced by 13- points to 11,475-level
at 12.30 pm.