Moreover, in case of annual payments, the consumer had the benefit of a drop in value of the vehicle after the second year (depreciated value) due to which the insurance premium was also lower. Then, analysts foresee a cost increase due to technological changes required to comply with new emission norms from 1 April 2020. They will stack up to make a significant difference to two-wheeler sales and the manufacturing companies’ prospects. Companies such as Bajaj Auto Ltd with high exports may be able to withstand the cost pressures better than firms such as Hero MotoCorp Ltd and TVS Motor Co. Ltd. The base is also higher now, given that the auto industry as a whole experienced robust demand for about two-three years.

Source: Mint September 27, 2018 04:07 UTC