Auto Stocks Outlook for the week - 28.11.2016 to 02.12.2016
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Some more pain may be there in the offing for shares of major automobile companies next week as market bias for the sector remains negative in line with the broader indices. The long-term outlook for the sector has also taken a beating following the withdrawal of high-value currency notes, which has impacted the sales of all automobile companies across segments. The currency curbs, announced Nov 8, led to a shortage of cash with consumers, and broke the momentum that had kept the demand outlook for the auto sector robust for the last three months on the back of good monsoon rains and hiked pay for government employees. The sales of four-wheelers have also been hit, as footfall in showrooms has declined by over 60%. In October, total sales of passenger vehicles in the domestic market had risen to 280,677 units, the highest since March 2012, up 4.5% on year. Faced with high inventories in the wake of declining sales, Federation of Automobile Dealers Associations had written to major automobile companies to stop fresh supplies till the time the situation improves.
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Some more pain may be there in the offing for shares of major automobile companies next week as market bias for the sector remains negative in line with the broader indices. The long-term outlook for the sector has also taken a beating following the withdrawal of high-value currency notes, which has impacted the sales of all automobile companies across segments. The currency curbs, announced Nov 8, led to a shortage of cash with consumers, and broke the momentum that had kept the demand outlook for the auto sector robust for the last three months on the back of good monsoon rains and hiked pay for government employees. The sales of four-wheelers have also been hit, as footfall in showrooms has declined by over 60%. In October, total sales of passenger vehicles in the domestic market had risen to 280,677 units, the highest since March 2012, up 4.5% on year. Faced with high inventories in the wake of declining sales, Federation of Automobile Dealers Associations had written to major automobile companies to stop fresh supplies till the time the situation improves.
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