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Automobile Sector


Downturn continued in December 2008.

Top automobile makers Bajaj Auto, Hero Honda Motors and Maruti Suzuki have announced their December 2008 sales numbers and the same continued to be depressed, much in line with our expectations. Automobile sales are usually modest in December because many consumers try to postpone their purchases to the new year when companies push sales through heavy discounts and offers.

Most automakers have already cut production and resorted to the annual maintenance shutdown of their manufacturing units due to the drop in demand. In fact, many are even extending the period of the shutdown. Though the liquidity situation at the ground level remains tight, the recent measures announced by the Reserve Bank of India to inject liquidity into the economy are likely to have some positive impact in the coming months.