The festive season demand that brings some cheers the domestic auto sales is proving to be very short-lived. After a festiveseason spike in October, the demand for passenger vehicles lost it ground in November, with sluggishness in the broader economy putting the brakes on auto sales.
Higher financing costs and the industry?s impending transition to BS VI emission norms will likely keep sales muted in the medium term. Vehicle acquisition prices have increased because of implementation of safety and emission regulations, and financing continues to be an issue. We think that the ongoing economy slowdown will take a couple of quarters to see some sign of recovery and auto sales will continue with the sluggish demands for? at least two more quarters.
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