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Auto sales for July due today: Slowdown may get worse as industry faces headwinds

Updated : August 01, 2019 09:25 AM IST

July has been worse than June in terms of auto sales. Dealer checks indicate that there has been incremental stress as far as dealer financing is concerned and that is the key talking point of July.

Inventory levels have increased and there's demand slowdown following a higher registration fee and road tax, but all in all, the dealer financing stress has been incremental compared to what we saw in June and that’s where the pressure lies.

In terms of individual stocks, across the board, we are going to see a cuts of anywhere between 20-25 percent; for passenger vehicle space, it’s in excess of 20 percent, commercial vehicles will be down about 15-20 percent odd as well and the bigger gashes may come in 2-wheeler space because of the increased registration as well as road tax that has been proposed.

For companies like Maruti, a 20 percent downtick is what Nomura is expecting this time around, for Hero Motocorp, they are forecasting 11 percent fall in terms of sales and for commercial vehicle companies like Ashok Leyland, it will be in excess of 10 percent.

Therefore, July is expected to be worse than the month of June.
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