Automobile sales Low impact of Local lockdowns: Coivd-19

According to Motilal Oswal Financial Services, automobile wholesale volumes are projected to fall on a month-over-month basis due to state-level lockdowns and supply-side problems.

Wholesales are likely to Decline MoM as a result of state-level lockdowns and supply-side problems. Except in ‘Tractors,’ according to the MOFSL report, queries were much fewer than average in May.

“While a high order book and a continued desire for personal mobility would boost PVs, robust demand for 2Ws is doubtful given the system’s huge inventory and the severe impact of the second Covid wave on rural and semi-urban markets,” the report stated.

“Wholesales are expected to fall MoM as a result of state-level lockdowns and supply-side difficulties.”

Furthermore, it stated that 2W demand is still low, with dealer stocks around 30-60 days.

“PV demand momentum is projected to resume once the lockout is removed, given inventory levels are low (less than 30 days) and fast selling models have a waiting time of 6-8 weeks. In the Infrastructure area, demand for M&HCVs is still high (based on enquiries in the present market), but it has decreased in the Cargo category.”

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“Agricultural tractor demand has mainly held steady, while commercial demand has slowed.”

Furthermore, it stated that while Covid-led lockdown had an impact on May 2021 across segments, volumes are likely to rebound as lockdown limitations are gradually lifted.

“Current values are mostly based on a long-term recovery (our base assumption), leaving little room for negative shocks. We favour 4Ws over 2Ws since PVs are currently the least hit market and provide a steady competitive environment.”

“The CV cycle recovery is expected to continue and gather traction. We want firms that have stronger demand visibility, solid competitive positioning, profitability drivers, and stable balance sheets.” —INDIAN NEWS

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