Recommendation: The auto index underperformed the broader market due to the weak demand environment and the recent announcements in the budget to promote Electric vehicles (OEMs will be compelled to accelerate the launch of EVs). We have a SELL on Eicher Motors given the sharp slowdown in the lifestyle biking segment. We recommend reducing positions in Ashok Leyland (Neutral) in the event of a stock price rally and buying Container Corporation of India, which will benefit from the upcoming Dedicated Freight Corridor. The persistent weakness in auto volumes in 1QFY20 was due to (1) Moderation in economic activity in an election quarter (2) Ongoing tight liquidity conditions due to the NBFC issue (3) Late arrival of monsoons (4) A demanding base effect. The logistics company CONCOR also reported flattish volumes in 1QFY20.