www.rupeedesk.in
Stocks of major automobile manufacturing companies are expected to move in a narrow
range next week in run up to the end of a rather subdued financial year for them in terms
of sales. The numbers (sales for March and Apr-Mar) are not expected to be anywhere
close to pleasing, so the companies would see rangebound action. The complete auto
space looks to be under pressure. If the government accepts industry demand of
exempting sub 1-mln-rupee sports utility vehicles from excise hike, it would be a positive
for counters such as Mahindra & Mahindra Ltd and Force Motors Ltd. Finance Minister
P. Chidambaram, in his Union Budget for 2013-14 (Apr-Mar) increased excise duty on
personal sports utility vehicles by 300 basis points to 30%.
According to the government's definition of SUVs, the vehicle must have an engine
capacity of more than 1,500cc, a ground clearance of more than 170 mm, and with a
length of more than 4 mtr. Tata Motors, whose stocks were hit by China's new stringent
emission norm, would not be affected further, as the vehicles of its subsidiary Jaguar
Land Rover should be able to meet the new guidelines by 2015 deadline. China is major
market for Jaguar Land Rover. Hero MotoCorp looks negative for the week, primarily on
the continued labour unrest in the company over failure of wage-hike negotiations.
