INSUBCONTINENT EXCLUSIVE:
A slowdown in consumption amid a cash crunch in the banking system has led to a pile of unsold vehiclesIndia's car stocks have lost $42
billion in value in the last 16 months, and some analysts say the rout may not be over.A gauge of automobile companies has fallen 30 percent
since reaching a record in December 2017, and is the worst-performer among 19 sector indexes in the nation's equity market this year
That's as the benchmark SP BSE Sensex Index rallied to a fresh peak last month.A slowdown in consumption amid a cash crunch in the banking
system has left carmakers with a pile of unsold vehicles in what was one of the world's fastest-growing auto market until last year
Little surprise then that Maruti Suzuki India Ltd., Hero MotoCorp Ltd
and Mahindra Mahindra Ltd
are among the biggest decliners on the Sensex this year, notching losses of up to 20 percent."Initial trends are looking weaker than
expected," Nomura Holdings Inc
analysts Kapil Singh and Siddhartha Bera wrote in a May 2 note
"Most companies in the sector have further earnings risks due to weaker-than-expected demand."Passenger vehicle growth in the financial year
ended March was the slowest since 2014, according to the Society of Indian Automobile Manufacturers
Maruti Suzuki, the nation's largest by market share, slid for seven days through Tuesday after saying April revenue declined 17 percent
from the year-ago month.Only two of the 16 companies on the SP BSE Auto Index have held their heads above water this year: Tata Motors Ltd.,
the maker of Jaguar Land Rover, rebounded last month after declining to its lowest level since 2011 in February
is up 11 percent amid an increase in its sales of two-and-three wheelers for the year ended March by a quarter to 5 million units.Auto
companies that have attractive products, are disciplined in managing their inventories and invest in research and development should still
outperform during the slowdown, Pramod Kumar and Anubhav Bajpai, analysts from Goldman Sachs Group Inc
wrote in a report.But they are still cautious: "We don't see any relief in the near term."(Except for the headline, this story has not been
edited by TheIndianSubcontinent staff and is published from a syndicated feed.)Get the latest election news, live updates and election
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