The automobile industry continued to be in the slow lane in August with all major players reporting significant declines in their respective sales.
Kapil Singh, an auto analyst at Nomura, said the demand situation is bad and given the economic slowdown, weak demand, and unless we have an improvement in economic growth, we are unlikely to see any swift revival in the auto industry.
"The slowdown has nothing to do with high GST rates because the rates have been more or less the same. In categories like four-wheelers there has been an economic slowdown, so measures that lead to revival and higher spending on infrastructure could lead to an improvement in demand," Singh told CNBC-TV18 on Wednesday.
"However, going forward because of the festive season there could some improvement in demand and increase in footfalls but year on year basis it is unlikely that the festive season this year would better than last year", said Singh.
Nomura has a 'buy' rating only on Mahindra and Mahindra in the original equipment manufacturers or OEMs space as it believes M&M offers attractive valuations. The brokerage house has a 'neutral' or a 'sell' view on other auto stocks.