Auto sales vs. stock prices
Mint reports that “Passenger vehicle sales are likely to grow at over 21% to nearly 1.4 million units in the fiscal year ending 31 March, the fastest growth in three years, fuelled by strong economy, rising money in the hands of consumers and new model launches.”
But a look at the recent performance of auto stocks tells a different story:
Except for Maruti, the major auto stocks have under-performed the Sensex over the past few days, especially Tata Motors & Ashok Leyland. Perhaps it is the commercial vehicle segment that isn’t doing as well as passenger vehicles. But with rising interest rates on auto loans, I doubt if the latter can keep up its strong performance, as suggested earlier.
Since stock prices usually lead news, let’s keep a watch on the news coming out of this sector.
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