Maruti Suzuki has shut down the petrol car production for 3 days.
The company is under stress due to rising inventory levels of Petrol cars.
With the widening gap in the petrol and diesel prices, more and more customers are shifting their preference towards diesel vehicle.
Currently Maruti procure diesel engines from Fiat and it is asking Fiat to supply more engines than contracted by Maruti.
Maruti should be looking to enhance the export of the petrol cars to ensure that the investment done at the petrol engine plant is not lost.
There is pressure across the automobile manufacturers due to rising fuel price and also high level of interest rates.
With a slowdown in the economy it is expected that RBI may decrease the interest rates, which may be breather for auto firms.
Firms like mahindra which have high proportion of diesel vehicles have done well and are expected to do well as compared to firms like Maruti.
Team Money Plant
Disclosure: Some of our clients may have position in Maruti Stocks
The company is under stress due to rising inventory levels of Petrol cars.
With the widening gap in the petrol and diesel prices, more and more customers are shifting their preference towards diesel vehicle.
Currently Maruti procure diesel engines from Fiat and it is asking Fiat to supply more engines than contracted by Maruti.
Maruti should be looking to enhance the export of the petrol cars to ensure that the investment done at the petrol engine plant is not lost.
There is pressure across the automobile manufacturers due to rising fuel price and also high level of interest rates.
With a slowdown in the economy it is expected that RBI may decrease the interest rates, which may be breather for auto firms.
Firms like mahindra which have high proportion of diesel vehicles have done well and are expected to do well as compared to firms like Maruti.
Team Money Plant
Disclosure: Some of our clients may have position in Maruti Stocks
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