THE INDIAN automobile sector is going through some tough times. True, as Table 1 shows, the sales of four-wheelers appear to be holding up - but that is thanks to outsize performance by sports utility vehicles or SUVs. Two-wheelers are not doing so well, which has ominous implications for demand conditions in the overall economy, as Table 1 also shows. And the massive collapse in demand for commercial vehicles in 2012-13 is shown in Table 2, which reflects the poor state of India's industrial production.
As Table 3 shows, light commercial vehicles, which run usually intra-city and shorter routes, are doing better than heavy commercial vehicles - though towards the end of the past 12-month period, both have seen a slight revival in fortune after a precipitous dip six months ago.
As Table 4 reveals, the top three two-wheeler producers have seen a steady drop in after-tax profit margins. Four-wheeler producers, as Table 5 shows, saw a spike in profitability in the quarter ended March 2012, but have seen margins decline since. (Click here for table)
While auto exports growth appeared healthy till at least 2011-12, as Table 6 shows, the components industry is heavily dependent on imports, as Table 7 reveals, and is thus vulnerable to rupee weakness.
The markets, however, have been relatively sanguine about four-wheeler stocks in the past few months, as Table 8 makes clear - but two-wheeler stocks, seen in Table 9, have not received similar forbearance.
