Nifty Auto plunges 7.7% in just 5 sessions; TVS Motor, Bajaj Auto fall up to 11%

The Nifty Auto pack has seen a significant decline of 7.7 per cent over the last five sessions. TVS, with an over 11% fall has emerged as the worst performer. Bajaj Auto, Eicher Motors and Samvardhana Motherson International also experienced notable drops during this period.

A Ksheerasagar
Published7 Oct 2024, 03:16 PM IST
Nifty Auto plunges 7.7% in just 5 sessions, TVS Motor, Bajaj Auto fall up to 11.3%
Nifty Auto plunges 7.7% in just 5 sessions, TVS Motor, Bajaj Auto fall up to 11.3%(Pixabay)

Indian auto stocks have emerged as one of the biggest casualties of the recent sell-off in the stock market, triggered by escalating tensions between Iran and Israel. Moreover, a slowdown in automobile sales in September and a weak outlook by major global car manufacturers are other factors exerting pressure on auto stocks.

Against this backdrop, the Nifty Auto index extended its losing streak to the fifth consecutive trading session on Monday, declining 1.50% to 25,544. From its peak of 27,696, scaled on September 27, the index has fallen 7.7%. 

TVS shares have emerged as the biggest index laggards during this period, falling 11.3%. They are closely followed by Bajaj Auto and Eicher Motors, both of which lost 10% each. Hero MotoCorp and Samvardhana Motherson International also experienced notable drops of 8% and 10%, respectively.

Maruti Suzuki India stock declined by 9%, while shares of Ashok Leyland and MRF recorded a fall of 10% each. Tata Motors dropped by 8.5%, Bharat Forge by 8%, Mahindra & Mahindra by 7%, and Bosch by 5% in the last five trading sessions.

Also Read | Indian automakers shift gears: Affordable, not premium cars in focus

Automobile sales decline 9.26% YoY in Sep

The latest data released by the Federation of Automobile Dealers Association (FADA) indicated persistent challenges in the automobile sector, with sales declining continuously amid waning consumer demand. Even the festive occasions of Ganesh Chaturthi and Onam failed to stimulate demand. 

The 2-wheeler retail sales declined by 10% month-on-month (MoM) and 8.5% year-on-year (YoY) due to low consumer sentiment, poor inquiries, and reduced walk-ins. Seasonal factors like the Shraddh period, Pitrapaksha, and heavy rains further played spoilsport, resulting in delayed purchases and a subdued market environment.

In the passenger vehicle (PV) category, retail sales plummeted by 10.8% MoM and 18.81% YoY, the FADA data showed. 

Also Read | Iran-Israel war: Challenges mount for textiles, auto parts MSMEs

"Seasonal factors such as Shraddh and Pitrapaksha, coupled with heavy rainfall and a sluggish economy, have exacerbated the situation, leaving dealers with historically high inventory levels of 80-85 days—equivalent to 7.9 lakh vehicles worth 79,000 crore," said FADA President, C S Vigneshwar.

"Given the critical festive season around the corner, FADA urges OEMs to take immediate corrective measures to avoid a financial setback. FADA also calls on the Reserve Bank of India to issue an advisory to banks, mandating stricter channel funding policies based only on dealer consent and on actual collateral, to prevent dealers from facing additional financial pressure due to unsold stock. This is the final opportunity for PV OEMs to recalibrate and support market recovery before it's too late," Vigneshwar added.

Also Read | Bajaj’s aggressive push threatens Ola’s EV dominance as share slips below 30%

Overall, September saw a decline 9.26% YoY decline in retail sales.

The PV industry has been facing challenges due to low consumer demand and rising inventory levels. To clear their stock, manufacturers have increased discounts, but these are yet to translate into a significant improvement in sales.

This surge in discounts has also raised concerns among investors, as it is likely to have a direct impact on the company's profit margins. After witnessing robust double-digit growth in FY22, FY23, and FY24, primarily fueled by the post-COVID demand recovery, PV sales have significantly slowed down, particularly in the last three months.

Analysts have projected a growth of 5% in PV sales in FY25, in contrast to over 8% improvement recorded in FY24.

Also Read | Can the Indian PV industry sustain its growth momentum in FY25?

The decline in PV sales is not limited to India; major global automotive giants are also experiencing significant challenges. All three major German automakers—Volkswagen, Mercedes-Benz Group AG, and BMW AG—have adjusted their sales forecasts for 2024 downward.

Volkswagen is reportedly considering plant closures in Germany, marking a potential first in the company's history.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.

MoreLess
First Published:7 Oct 2024, 03:16 PM IST
Business NewsMarketsStock MarketsNifty Auto plunges 7.7% in just 5 sessions; TVS Motor, Bajaj Auto fall up to 11%

Most Active Stocks

Tata Steel share price

139.25
01:24 PM | 13 NOV 2024
-4.9 (-3.4%)

Bharat Electronics share price

282.30
01:24 PM | 13 NOV 2024
-7.95 (-2.74%)

Tata Motors share price

787.00
01:24 PM | 13 NOV 2024
2.05 (0.26%)

Tata Power share price

403.25
01:24 PM | 13 NOV 2024
-11 (-2.66%)
More Active Stocks

Market Snapshot

  • Top Gainers
  • Top Losers
  • 52 Week High

Suzlon Energy share price

54.73
01:21 PM | 13 NOV 2024
-4.66 (-7.85%)

Rattanindia Enterprises share price

62.81
01:20 PM | 13 NOV 2024
-5.14 (-7.56%)

Hitachi Energy India share price

11,990.00
01:20 PM | 13 NOV 2024
-965.15 (-7.45%)

Aditya Birla Real Estate share price

2,523.05
01:21 PM | 13 NOV 2024
-189.55 (-6.99%)
More from Top Losers

KNR Constructions share price

306.65
01:20 PM | 13 NOV 2024
22.5 (7.92%)

Piramal Pharma share price

261.50
01:20 PM | 13 NOV 2024
10.95 (4.37%)

Suven Pharmaceuticals share price

1,247.10
01:20 PM | 13 NOV 2024
43.35 (3.6%)

Medplus Health Services share price

691.35
01:20 PM | 13 NOV 2024
15.7 (2.32%)
More from Top Gainers

Recommended For You

    More Recommendations

    Gold Prices

    • 24K
    • 22K
    Bangalore
    76,865.00-440.00
    Chennai
    76,871.00-440.00
    Delhi
    77,023.00-440.00
    Kolkata
    76,875.00-440.00

    Fuel Price

    • Petrol
    • Diesel
    Bangalore
    103.02/L0.10
    Chennai
    100.90/L0.10
    Kolkata
    104.95/L0.00
    New Delhi
    94.77/L0.00

    Popular in Markets

      HomeMarketsPremiumInstant LoanMint Shorts