Auto stocks rallied in the afternoon session on Thursday after Transport Minister Nitin Gadkari said the government was considering a cut in the goods and services tax (GST) rate on hybrid vehicle.
The government’s plan comes at a time when the auto sector is grappling with a steep drop in sales due to weak consumer demand, with several top automakers and component manufacuturers cutting production and laying off employees.
At 01:21 am, Maruti was quoting 2 per cent higher at Rs 5,940.65 apiece while Mahindra & Mahindra (M&M) rallied over 2 per cent to Rs 517.15. The Nifty Auto index was trading 1.67 per cent higher at 6,895.50 levels.
Tata Motors advanced the most, surging 6 per cent in the intra-day trade after its British arm Jaguar Land Rover (JLR) said it plans to launch 30 new or revamped vehicles in China in the next two years, seeking to build on a recent recovery in sales in the world's biggest auto market.
JLR said the models would include imported ones as well as products built by Chery Jaguar Land Rover, its local joint venture with Wuhu-based carmaker Chery Auto, according to a Reuters report.
The plan follows a 17 per cent rise in JLR’s sales in China in August and a 40 per cent jump in July, after a more than 20 per cent decline last year.
At 01:21 am, the stock was trading over 5 per cent higher at Rs 115.40 apiece on the BSE. A total of 50.41 million shares were traded on the BSE and NSE till the time of writing this report. The S&P BSE Sensex was trading at 36,605 level, down 120 points or 0.33 per cent.