The battered automobile sector is hoping to cash in on the upcoming festival season. The companies, which have witnessed a fall in sales owing to the high interest rate scenario, are keeping their fingers crossed hoping that sales might pick up during the festive season.
The dependency on external finance is very high with respect to buying an vehicle in India, as according to rough estimates, almost 70% two-wheelers and 90% four wheelers bought in the country are on borrowed money.
Industry experts said that automobile companies are gearing up for the forthcoming festive season and that is very apparent from the volumes clocked by them in August 2007.
Two-wheeler players declared mixed numbers for the month while the four-wheeler players turned in a better performance in contrast to the anticipated sluggish sales of July.
Vaishali Jajoo, auto sector analyst at Angel Broking, said, ?Auto companies are hopeful that the domestic interests rates may soften and the second half of this financial year may see a revival of sales, both in the two-wheeler and four-wheeler segment. Though the numbers may not be the same or higher than the corrresponding period of the previous year, still sales is expected to pick up during the festival season.?
It?s just not sales in the automobile sectors that are a concern. The Bombay Stock Exchange?s sectoral index dedicated to automobile sector, BSE Auto, has also been losing steam in past few months.
During the last three months, BSE Auto index has risen by meagre 88.29 points or 1.83%.