Auto ancillary and tyre stocks also advanced in trade today. Bharat Forge zoomed 15 per cent while Motherson Sumi surged 10 per cent. Apollo Tyres was up as much as 8 per cent. Exide Industries, MRF, and Amara Raja Battery gained in the range of 4-5 per cent while Bosch was up 3.6 per cent.
Meanwhile, in a report dated April 30,2020, Nirmal Bang said it expects the auto industry dispatches to be near zero in April.
"We expect minimal to nil wholesales by Auto Original Equipment Manufacturers (OEMs) in the month of April’20 on the back of nationwide lockdown...OEMs have not started actual production at factories due to various limitations and also they don’t expect meaningful improvement in production after May 3, when the lockdown is expected to be lifted," the brokerage said in a note.
"There are limitations at every stage of the supply chain. OEMs are grappling with issues in raw mterial availability, sourcing of components, workforce availability, transportation and driver availability, and lastly most dealerships are closed. Most of the OEMs believe that meaningful production ramp up will only be possible when the dealerships are allowed to open, and vendor network is restored to ensure continuous supply of components," it said.
According to SIAM estimates, if India’s GDP growth for FY21 falls below 1 per cent, passenger vehicle (PV) sales will likely decline by 20-24 per cent while two-wheeler sales may drop by 27-30 per cent. In the case of commercial vehicles, the drop could be as much as 32-35 per cent while three-wheeler sales may decline by 28 per cent.
In January 2020, Society of Indian Automobile Manufacturers (SIAM) projected auto industry growth of 2-4 per cent, but with the lockdown that has stalled industrial activity, it now expects industry recovery to be slow. SIAM has sought GST cut and incentive based scrappage policy from the government to revive the sector.