On Thursday, stocks of Indian auto manufacturers fell sharply as September sales data indicated a significant slowdown. Bajaj Auto's shares dropped over 8% after reporting a 12% year-on-year decline in domestic sales for September.
Mahindra & Mahindra's shares also fell more than 3% before a slight recovery, despite the company selling 64,092 passenger cars, which was a 14% increase from the previous year, but much lower than the 50% growth seen in August. Maruti Suzuki, the largest car seller in India, experienced a decline of over 2% in its shares ahead of its September sales report.
The Indian auto sector had been experiencing robust growth, with August sales reaching record levels, as noted by the Society of Indian Automobile Manufacturers (SIAM). Passenger car sales surged 36.5% year-on-year to 439,309 units, while two-wheeler sales increased by 10.5% to over 2 million units.
Rajesh Menon, director general of SIAM, had previously expressed optimism about healthy sales in the September quarter due to festive demand. However, the early sales data suggests a worrying trend of softening demand, which could impact investor confidence and the overall economic outlook for the sector