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Automobile sector suffers worst fall in sales since 1998, Car and SUV sales slide further

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Automobile sector suffers worst fall in sales since 1998, Car and SUV sales slide further

The downturn in automobile sector worsened with sales shrinking further to record the steepest ever fall in August, a record fall in 10th straight month, and huge job losses coming in its wake.

Passenger car sales declined by 41 per cent year-on-year (YoY) in August to 1,15,957 units as compared with 1,96,847 units in the same month last year, media reports said.

As per the latest report shared by Society of Indian Automobile Manufacturers (SIAM), the passenger vehicle sales domestic market also declined by around 32 per cent to 1,96,524 units during last month as against 2,87,198 units in the corresponding month last year.

Passenger car sales fell 41.09% to 115,957 units.

This is the worst-ever fall for both the categories since SIAM started recording the data in 1997-98. Truck and bus sales dropped 39%. Two-wheeler sales fell 22% to 1.5 million units.

The slump in auto sales had led to massive job loss in the sector. Automakers, parts manufacturers and dealers have laid off about 350,000 workers since April, Reuters reported. Companies from Suzuki Motor Corp.’s local unit to Mahindra & Mahindra Ltd. have cut production and laid off workers to cope with the slowdown.

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Hinduja Group flagship firm Ashok Leyland today – Monday, Sep 9 – announced non-working days at its various manufacturing facilities following weak demand. “Following are the non-working days at our various plant locations during September 2019 due to continued weak demand for our products”, the company said in a BSE filing.

The move by the company follows slowdown in the automobile sector that has forced many manufacturers and component suppliers to cut production and plan temporary plant closures.

Accordingly, Chennai-based heavy commercial vehicle major has announced 16 non-working days for its facility in Ennore, five days at Hosur (Tamil Nadu) unit, 10 days each in Alwar (Rajasthan) and Bhandara (Maharashtra) unit and 18 days in Pantnagar (Uttarakhand) facilities.

Last month, Chennai-based TVS Group auto component maker Sundaram Clayton, automobile major Maruti Suzuki, and two-wheeler maker Hero MotoCorp had announced a suspension of production at their facilities in line with market demand. Maruti Suzuki, India’s largest carmaker, had last week said it has suspended production at its Gurugram and Manesar plants in Haryana for two days. Maruti Suzuki has closed both plants simultaneously for two days for the first time.

Market leader Maruti Suzuki India had reported a 36 per cent YoY decline in sales during August to 93,173 units (1,45,895 units).

Hyundai Motor India also reported a double-digit YoY decline in sales (17 per cent) to 38,205 units (45,801 units in the same month last year).

Honda Cars India and Tata Motors, in particular, reported the most dismal numbers, selling less than half of the units they sold last year in August.

In the commercial vehicle segment, the sales declined by 39 per cent to 51,897 units in August, a drop of 39 per cent YoY as compared with 84,668 units in August 2018.

In the two-wheeler segment, both scooter and motorcycle sales declined by a little more than 22 per cent YoY. While the scooter sales during the month were recorded at 5,20,898 units (versus 6,69,416 units), the motorcycle sales fell to 9,37,486 units (against 12,07,005 units).

Two-wheeler makers including Hero MotoCorp, Honda Motorcycle and Scooters India, Bajaj Auto and TVS Motor also had reported a decline in sales during August.

Three-wheeler sales also declined by 7 per cent YoY to 58,818 in August as compared with 63,199 units in the same month last year.

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The automobile sector requires an immediate decision from the government on GST reduction (from 28 per cent to 18 per cent) which may help boost sales during the festive season, said media reports on basis of inputs from companies and industry leaders.

Recently, at the SIAM and ACMA conventions, the industry demanded a quick intervention from the government on reducing GST, at least for some time, to gain back the sentiments in consumers.

However, the GST fitment committee that held a meeting for two consecutive days last week suggested no assurance for any GST cut for the automobile sector.

The industry has to wait for the GST Council meet on September 20 for a holistic picture and if they get any relief from the decisions that are made on the day.

Narendra Modi government has lifted a ban on new vehicle purchases by state-run departments and offered other concessions. Transport Minister Nitin Gadkari last week said he’ll convey a demand for a lower levy on petrol and diesel vehicles to the finance minister.

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Google announces country-specific domain names for its search page

This transition to a centralised domain may help Google optimise AI performance in delivering relevant search results.

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In a significant move aimed at unifying its search experience, Google has announced plans to phase out country-level domain names, such as google.ng for Nigeria and google.com.br for Brazil. Instead, the tech giant will redirect users globally to a standardised domain, google.com. This decision aligns with Google’s ongoing effort to enhance search functionality and accessibility, building on the improvement in local search capabilities introduced in 2017.

In a recent blog post, Google explained that it will begin redirecting traffic from these country code top-level domains (ccTLDs) to google.com. This transition will be implemented gradually over the coming months. Users may be prompted to adjust their search preferences during this process, as the company works to streamline the user experience.

“Historically, our approach to delivering localised search results relied on ccTLDs,” Google stated. “However, our capability to offer localised experiences has evolved significantly, making these distinctions unnecessary.” The company reassured users that the core functionality of its search platform will remain unchanged and that compliance with various national regulations will continue.

This initiative reflects Google’s commitment to improving how search results are tailored to individual users without the need for separate country-specific domains. While the official rationale emphasises enhancing global user experience, some industry experts speculate that the change may also be motivated by a desire to better integrate artificial intelligence (AI) into search results, potentially leading to reduced operational costs.

Google employs AI Overviews, a tool designed to aggregate information from a broad range of online sources to provide concise responses to user inquiries. This transition to a centralised domain may help Google optimise AI performance in delivering relevant search results.

Overall, as Google implements this shift, users can expect a more unified search experience. While changes in browser addresses may occur, Google emphasises that the way search operates and its compliance with national laws will remain consistent. This strategic shift signifies Google’s ongoing efforts to adapt to the evolving digital landscape and user needs globally.

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In HUL vs HCL defamation case, Delhi HC orders take down of Lakme sunscreen ad disparaging Derma Co

Honasa, in its plea to the Delhi High Court, argued that HUL’s claims are misleading and disparage competitors, damaging their reputation. In retaliation, HUL filed a countersuit against Honasa in the Bombay High Court, escalating the corporate feud.

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A legal showdown between Honasa Consumer Ltd. (HCL), the parent company of Mamaearth, and Hindustan Unilever Ltd. (HUL), which owns Lakmé, reached the Delhi High Court this week, with both FMCG giants filing defamation lawsuits against each other. On Thursday, the court ordered HUL to pull its current Lakmé sunscreen advertisements, prompting the company to agree to revise its campaign by removing references to “online bestseller” and altering the depicted packaging colours.

The dispute centres on Lakmé’s recent “SPF Lie Detector Test” campaign, which HCL alleges unfairly targets its Derma Co. sunscreen by questioning the efficacy of rival products.

In the ads, HUL claims that some “online bestseller” sunscreens, marketed as SPF 50, provide protection closer to SPF 20, based on in-vivo testing data from the past decade. While no brands are explicitly named, visuals juxtaposing yellow bottles—resembling Derma Co.’s packaging—against Lakmé’s sparked Honasa’s ire.

Honasa, in its plea to the Delhi High Court, argued that HUL’s claims are misleading and disparage competitors, damaging their reputation. In retaliation, HUL filed a countersuit against Honasa in the Bombay High Court, escalating the corporate feud.

The controversy erupted when Ghazal Alagh, co-founder of Honasa, took to LinkedIn to criticise the FMCG sector’s lack of competitive drive, suggesting that legacy brands like HUL have grown complacent. Her comments were seen as a direct jab at Lakmé’s campaign, which challenges the SPF claims of newer sunscreen brands dominating online markets. “The industry needs fresh competition to shake things up,” Alagh wrote, igniting a public spat.

Lakmé’s campaign asserts that some top-selling sunscreens falsely claim in vivo testing—a method involving live organisms like humans or animals—while delivering subpar protection. In a social media statement, Lakmé doubled down, saying, “Certain online bestsellers advertise SPF 50, but their in-market samples test closer to SPF 20.”

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Sensex and Nifty jump nearly 2% as US suspends additional 26% tariffs on India until July 9

Foreign Institutional Investors (FIIs) had sold equities worth ₹4,358.02 crore on Wednesday, signaling caution, but Friday’s momentum suggested a shift in sentiment.

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Indian stock markets staged a robust rally on Friday, with the BSE Sensex skyrocketing 1,310.11 points, a 1.77% gain, to close at 75,157.26. The NSE Nifty followed suit, climbing 429.40 points or 1.92% to settle at 22,828.55, breaching the 22,900 mark during intra-day trading. The surge came on the heels of a White House announcement suspending additional tariffs on India for 90 days until July 9, offering a reprieve amid global trade tensions.

The US decision, detailed in recent executive orders, pauses levies that President Donald Trump had imposed on April 2, targeting India and roughly 60 other nations. Those duties threatened Indian exports ranging from steel to shrimp, raising concerns about competitiveness in the US, the world’s largest economy. The temporary suspension sparked optimism among Indian investors, propelling gains across major sectors.

Leading the charge among Sensex constituents were heavyweights like Tata Steel, Reliance Industries, Power Grid, NTPC, Kotak Mahindra Bank, and Adani Ports. However, not all stocks joined the rally—Asian Paints and Tata Consultancy Services lagged behind, unable to capitalize on the upbeat mood.

Vinod Nair, Head of Research at Geojit Investments Limited, attributed the market’s buoyancy to the tariff relief. “The unexpected pause on US tariffs provided a much-needed breather amid global uncertainties,” Nair noted. He added that while a major IT firm’s recent results fell short of expectations, its robust order book signaled potential growth in the latter half of FY26.

The Indian markets’ performance stood in stark contrast to global trends, where fears of a US-China tariff war cast a shadow. On Friday, China escalated its trade spat with the US, hiking tariffs on American imports to 125% in response to Washington’s 145% levies on Chinese goods.

Asian markets reflected the unease, with Tokyo’s Nikkei 225 plunging nearly 3% and South Korea’s Kospi slipping, though Shanghai’s SSE Composite and Hong Kong’s Hang Seng bucked the trend with gains. European markets traded lower, while US indices had closed sharply down on Thursday, with the Nasdaq tumbling 4.31%, the S&P 500 falling 3.46%, and the Dow Jones shedding 2.50%.

Back home, the rally followed a lackluster Wednesday, when the Sensex dipped 379.93 points to 73,847.15 and the Nifty fell 136.70 points to 22,399.15. Thursday’s market holiday for Shri Mahavir Jayanti gave investors a pause before Friday’s surge. Foreign Institutional Investors (FIIs) had sold equities worth ₹4,358.02 crore on Wednesday, signaling caution, but Friday’s momentum suggested a shift in sentiment.

Elsewhere, global oil prices edged up, with Brent crude rising 0.32% to $63.53 a barrel, reflecting ongoing volatility in commodity markets.

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