The car sales plummeting more than 30% for most automobile makers due to weak economic growth and liquidity crunch. International Monetary Fund (IMF) has cut down India’s GDP growth projections to 6.1% for FY20. Weak global growth and trade tensions between the US and China make steel picture even more dramatic. RCEP negotiation with China, Australia, and New Zealand is round the corner and India’s further commitments with these countries will create panic among steel players.
Ray of hope
The pre-buy of cars before the introduction of BSVI vehicles can surge auto demand. “Pradhan mantra Gram Sadak Yojana” (PMGSY), a government’s initiative meant to augment 1,25,000 km of rural road has immense potential to boost domestic steel consumption. Although Dussera and Diwali sales have provided some sort of cooling effect as far as consumer durables sales are concerned but the stimulus package like lowering of GST rates from 28 to 18% for cars will be a significant relief.
