Demand in the aftermarket is also likely to remain weak, but dealers will be least affected.

Mumbai: Revenues of the auto ancillary sector are expected to fall by 16-20% this fiscal due to falling demand in the domestic market and exports, according to India Ratings and Research. The credit rating agency also said in a statement on Tuesday that it will maintain a negative outlook for the automotive ancillary sector from October 2020 to March 21, 2020

Auto components in the commercial vehicle segment are expected to continue to be the worst affected as compared to those in the two-wheeler, passenger car or tractor segments.

The Indian Rating Council (Ind-Ra), in a press release, expects the industry to start recovering from the second half of 2020-210.

Aftermarket demand is also likely to remain weak but with minimal impact. However, October-March 2020-2021 is expected to perform better than the first half of the year with gradual improvement in demand for cars in the domestic export market.

The announcement said that the second half of the current fiscal is expected to recover to pre-COVID-19 levels due to improvement in OEM and export demand.

As we head into the festive season, cars are running at full throttle

Ind-Ra expects sales of automotive ancillaries to grow by 12-15% year-on-year in 2021-22, the same as most automotive ancillaries. We have taken cost reduction measures FY fixed costs. However, lower operating leverage could reduce margins by 200-250 basis points year-on-year.

Rating agency Ind-Ra has also maintained a negative outlook on its 2020-21 ratings portfolio as business performance and credit metrics will continue to be weaker than expected in a difficult economic environment. Explanation.

Credit metrics are expected to soften further in 2020-21. The report says that the decline in profitability over the past two years is likely to have a negative impact on credit metrics, despite the fact that companies in the sector have deferred unnecessary capital expenditure in 2019-20 and 2020-21.

Credit metrics are expected to improve in 2021-22 as profitability recovers. However, the company said it will still be lower than 2019-2019-20 levels.

China Great Wall Motors hopes to get a quick response from the Indian government on investment approvals.

The agency said that requirements for capital expenditure, including corporate average fuel efficiency standards, and policies to be implemented over the next two years could weaken medium-term credit metrics if demand does not recover as expected.

Cost control and working capital management remain key in this environment, he added.

Favorable regulatory changes such as reduction in GST or incentive-based scrappage policies may help restore demand in the automotive sector and hence demand for auto parts in the medium term.

PSA Group and Gomechanic have partnered to bring the Eurorepar handrail product line to India. OEMs may also consider buying locally imported components to benefit the industry in the medium to long term. Addition of assessment organizations.