Ukraine effect: More pain ahead for auto firms a commodity prices spike

Inability to pass on the entire cost will squeeze margins

The auto index has borne the brunt of the market decline becoming the largest loser among sectoral indices over the last month. It was also among the top losers (down over 4 per cent) on Monday, wherein stocks of most automobile makers declined between 4 and 6.5 per cent. The BSE Auto index lost just under 16 per cent in the one month period which is about twice the losses incurred by the benchmark BSE Sensex. The sharp rally in commodity prices due to the geopolitical events in Ukraine and its impact on margins, higher cost of ownership, muted volumes