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Auto, Manufacturing Industries At Loss From The Declining Market Needs

New projects and investments have been put on hold, most of all, Auto, Manufacturing industries are facing the heat wave from the declining market needs.

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India, Tax cut, Automotive Industry
India's automotive industry is likely to be one of the key beneficiaries of the recent corporate tax cut. Wikimedia Commons

The ongoing economic slowdown in the country has claimed the livelihood of lakhs of people. New projects and investments have been put on hold, while a revival could take longer as investor confidence in companies cut a sorry picture at the exchanges. Most of all, Auto, Manufacturing industries are facing the heat wave from the declining market needs.

Data from the bourses suggest that in just the past one year, the automobile and manufacturing companies, have seen over one-third of their share value getting eroded, on average, indicating a sharp decline in these companies’ abilities to raise capital in the market.

During the period in consideration, the Nifty metal index has lost the most among the 11 sectors constituting the benchmark index.

Manufacturing companies like SAIL and Jindal Steel, which constitute the metal index, declined by 35 per cent, on an average. Not a distant second was the auto index, which fell over 33 per cent.

Auto, Manufacturing, Market, Growth
Robots work on the cab of a 2019 Ram pickup at the Fiat Chrysler Automobiles Sterling Heights Assembly Plant in Sterling Heights, Mich., Oct. 22, 2018. Manufacturing is one are where robots are part of the workforce. VOA

Among the 15 constituent stocks of the auto index, Tata Motors, Motherson Sumi Systems and Ashok Leyland have been worse hit, losing 55 per cent , 66 per cent and 51 per cent, respectively. Bajaj Auto seems to have bucked the trend, coming down merely 2 per cent amid companies severely hurt owing to the slowdown.

Latest data shows that automobile sales for the month of August hit the lowest since 1997-98.

Steel companies are witnessing a similar trend. The state-owned Steel Authority of India (SAIL) has lost over 57 per cent, while Jindal Steel has also shed over half of its share value in the last one year.

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Six of the 15 companies constituting the index have lost over 40 per cent of their share value.

The state-run bank index – Nifty PSU Bank index – despite a slew of measures that have been announced for the sector, has yet to regain investor interest. The PSU (public sector undertaking) bank index has declined by 21 per cent during the same period.

The Nifty pharma index – investment in which firms are considered to be relatively safe during downturns, and, therefore, called defensive investments — fell 22 per cent.

The Nifty media index also also shed over 30 per cent. (IANS)

Next Story

Samsung India Renews its Focus on AC Business to Become Top Player

Samsung currently sells ACs in the premium segment. The ACs coming next year will range from Rs 26,000 to Rs 70,000

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Samsung
Samsung said it will expand its inverter AC lineup and make a re-entry into the window AC and on/off AC segments in 2020, thereby addressing 100 per cent of the Indian market. Wikimedia Commons

Electronics major Samsung India is renewing its focus on the air conditioner (AC) business in India and aims to become the top player in the country by 2022, a senior company executive said on Thursday.

To achieve this target, Samsung is aiming to double its AC business every year over the next two years and expand its product portfolio.

Samsung currently sells ACs in the premium segment. The ACs coming next year will range from Rs 26,000 to Rs 70,000.

“Our objective is to be in the top 3 in the next two years and become No. 1 by 2022 and we are very confident of achieving this as we become a full-range player in the AC business,” Rajeev Bhutani, Senior Vice President, HVAC division, Consumer Electronics Business, Samsung India, told IANS.

The AC business in India has been growing at a fast rate over the last few years. In 2019, it grew at around 25 per cent and is expected to maintain similar growth levels in 2020.

The growth is coming on the back of changing lifestyles, urbanisation, higher electrification across the country and also due to the fact that current AC penetration levels in the country are just at 5 per cent.

Samsung said it will expand its inverter AC lineup and make a re-entry into the window AC and on/off AC segments in 2020, thereby addressing 100 per cent of the Indian market.

Samsung
Electronics major Samsung India is renewing its focus on the air conditioner (AC) business in India and aims to become the top player in the country by 2022, a senior company executive said on Thursday. Wikimedia Commons

To drive the growth, Samsung has set up a separate heating, ventilating and air conditioning (HVAC) HVAC division within its consumer electronics business. This includes both room ACs and commercial ACs.

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To tap further into tier-II and III cities, Samsung will expand its network from 9,000 outlets to 14,000 pan India in the first half of 2020, strengthening its retail and distribution.

The company said it will also set up 300 exclusive HVAC stores in 2020, which will showcase Samsung AC both for homes and commercial uses, offering completed solutions. (IANS)