Year-to-date (year-to-date), the auto sector has posted an impressive 43% gain. | Image:Republic
The performance of auto stocks in the country’s capital market performed well in calendar year 2023 amid various macroeconomic challenges. Year-to-date (YTD), the sector has surged an impressive 43%, outpacing the benchmark index, which rose 17% during the same period.
Notably, the Nifty Auto index rose to an all-time high of 18,182.10 levels last week.
Major companies such as Hero MotoCorp, Tata Motors, Bajaj Auto, Mahindra & Mahindra (M&M), Ashok Leyland, TVS Motor Company and Eicher Motors have emerged as major contributors to the performance of the automobile sector. In particular, Tata Motors has soared 85% year-to-date, Bajaj Auto has soared more than 80%, and Eicher Motors has soared more than 27%, all hitting 52-week highs on strong demand. .
The surge in demand and sales can be attributed to lower input costs and strategic price increases, leading to margin expansion and stable profit growth. The festive season gave another boost to sales, with companies like Maruti and Mahindra & Mahindra (M&M) posting record numbers.
The total production of passenger cars, three-wheelers, two-wheelers and four-wheelers reached 2,228,743 units in November. Domestically, 3.34 million passenger cars, 59,738 three-wheelers, and 16.23 million two-wheelers were sold during the same period.
SIAM Director General Rajesh Menon said passenger vehicles achieved record sales in November 2023 with a growth rate of 3.7%. Compared to the same period in 2022, three-wheelers reported a remarkable growth of 30.8%, while two-wheelers showed a high growth of 31.3%.
According to a report by the Federation of Automobile Dealers Associations (FADA), November marked the highest ever car sales in the history of the Indian car market, with the overall sales during the festive period in 2023 rising by a staggering 19%. The total number of units increased to 3,793,000 units. unit.
The decline in commodity prices due to the slowdown in the Chinese economy and the global macroeconomic downturn further supported the auto sector. Notably, India, as the world’s third largest automobile market, accounts for her 7.1% share of the country’s GDP.
India aims to double the size of its auto industry to Rs 15 billion by the end of 2024, according to a report by Invest India.
In August, the government extended the Rs 25,938-crore production-linked incentive (PLI) scheme for the auto sector by one year, making it valid till 2027-28. The scheme is applicable to Advanced Automotive Technology (AAT) products manufactured in India from April 1, 2022 onwards.
According to the report, the Indian automobile industry generated a revenue of Rs 8,700 crore in FY23.
Additionally, Road Transport and Highways Minister Nitin Gadkari announced plans for ethanol-fueled vehicles in India.
Hyundai Motor India and Hero have also made significant strides in the electric vehicle (EV) space, with Hyundai planning to launch its first electric SUV in 2025 and Hero announcing an agreement with Zero on premium electric motorcycles in March. An agreement was concluded.