Auto stocks lose speed on slowdown worries
Auto stocks are in a bear grip on concerns of a slowdown in sales. The ET Auto index has lost 15% of its value since the beginning of March this year. The first two months of the current fiscal reveal not very encouraging numbers. While the growth in passenger cars has slowed down, commercial vehicle makers are reporting negative growth. Two-wheeler manufacturers — Hero Honda, Bajaj Auto and TVS Motor — are trying to cope up with declining sales in their 'bread & butter' 100cc motorcycles. And going forward prospects don't look too bright. Analysts and industry insiders believe there could be a further slowdown in auto sales. This may just spell bad news for auto investors. However, a closer look at auto numbers for April-May 2007 shows that the scenario is not as bleak as it appears to be at first glance.
