Shares of automobile companies are under pressure in morning trades on concerns of slowdown in demand for petrol vehicle after the state-owned oil marketing companies raised the price of petrol by a record Rs 6.28 a litre.
“In the short-term, sales will be further impacted while in the long term a negative consumer sentiment will be created which can hurt the growth of the auto industry,” the PTI report suggests quoting Sugato Sen, senior director of Society of Indian Automobile Manufacturers (SIAM).
The hike in petrol price will severely affect the sales of entry level cars, which are mainly petrol driven. This will also, result in inventory pile up of petrol vehicles as more and more consumers will opt for diesel vehicles, added report.
Among the individual stocks, Maruti Suzuki has dipped 3% at Rs 1,117, its lowest level since January. Bajaj Auto, Ashok Leyland and Hero MotoCorp are trading lower by 1-2% on the Bombay Stock Exchange.
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