Crude Oil Surge Pulls Nifty Auto Down Over 2% Despite Strong August Sales

The rise in crude oil prices jolted stocks of auto companies on September 2, even as all auto firms posted strong sales figures for the month of August.

The sectoral index was down 2.24% at 27,853.55 at around 10:30 am. Weakness was visible in the wider market too. At 10:33 am, the Nifty 50 traded 169 points, or 0.70%, lower at 23,886.70. The Sensex lost 451 points to reach 76,493.36.

The immediate concern for investors was the fresh rise in crude prices after the US and Iran exchanged strikes overnight. The price of Brent crude increased by 0.8% to reach $95.40 per barrel in early deals as it rose by more than $4 per barrel on the previous day. The price of WTI also increased by 0.5% to reach $90.66.

Cost concerns weighed on automobile counters. More expensive crude can push up manufacturing and freight expenses, contribute to inflation and eventually affect vehicle demand. A cautious mood across Indian equities added to the selling in the sector.

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None of the Nifty Auto constituents escaped the decline. Hero MotoCorp suffered the steepest fall, losing 5.18% to trade at Rs 5,267.50. Eicher Motors was down 3.99% at Rs 7,652. Bosch declined 3.43%, Sona Comstar dropped 3.05% and Bajaj Auto slipped 2.75%. Mahindra & Mahindra lost 1.86%. Maruti Suzuki fell 1.32%, while TVS Motor was down 0.98%.

However, there was a disparity between the market response and the sales figures issued by automobile companies for August. Demand remained healthy across several categories, while the comparison was also helped by the base of August 2025, when customers had postponed purchases ahead of tax cuts.

Jefferies reported year-on-year registration growth of 24-29% across two-wheelers, passenger vehicles and trucks. Tractors were the exception, recording a relatively modest increase of 3%.

The brokerage estimated that domestic wholesale volumes for passenger vehicles and trucks increased by 36-43%. Growth of around 10% was seen in two-wheelers and tractors.

TATA Motors Passenger Vehicles outperformed other companies by increasing its sales by 56%, as compared to the previous year. Some of the other companies which have seen positive performance include Ashok Leyland, Mahindra & Mahindra, Bajaj Auto, Maruti Suzuki, and TVS Motor, where their sales increased by anywhere between 21% to 38%.

Commercial vehicles were another area where the August numbers exceeded expectations.

Nomura pointed to firm demand for medium and heavy commercial vehicles. Tata Motors’ commercial vehicle business and Bajaj Auto performed well ahead of its estimates. The brokerage attributed the relatively weaker figures from Maruti Suzuki, Hyundai and TVS Motor to supply constraints rather than soft demand.

Mahindra & Mahindra, Hyundai Motor India, Tata Motors CV, TVS Motor and Sona Comstar feature among Nomura’s preferred names in the automobile sector.

Bajaj Auto sold 5.35 lakh units in August, an increase of 28% from the previous year. The result exceeded Nomura’s estimate of 4.88 lakh units. Mahindra & Mahindra recorded overall sales of 1.07 lakh units, up 42%. Both shares had gained in the preceding session after the companies published their monthly numbers.

Tata Motors CV reported a 49% year-on-year increase to 44,411 units. This was above Nomura’s projection of 38,800 units. Ashok Leyland sold 21,038 units, representing growth of 38% and another result ahead of expectations.

Citi also found volumes strong across most original equipment manufacturers in August, although it said the year-on-year growth rates benefited from a weaker base following the previous year’s GST cut.

The performance of Ashok Leyland and Tata Motors CV drew particular attention from Citi. Commercial vehicle demand at both companies remained impressive despite a less supportive base comparison. The brokerage placed Maruti Suzuki first among its sector preferences, followed by Eicher Motors and Mahindra & Mahindra.

The August sales data showed firm demand in most segments, but it was not enough to counter the pressure from the overnight rise in crude oil prices during morning trade on September 2.