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Auto, Auto Ancillary Q2 Preview - Industry Braces For Chip Shortage, Rising Input Costs: ICICI Securities

Auto, Auto Ancillary Q2 Earnings Preview - Industry Braces For Chip Shortage, Rising Input Costs: ICICI Securities

<div class="paragraphs"><p>An employee holds an automobile component in an auto parts manufacturing factory. (Photographer: Marlene Awaad/Bloomberg).</p></div>
An employee holds an automobile component in an auto parts manufacturing factory. (Photographer: Marlene Awaad/Bloomberg).

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

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The auto industry witnessed ~32% QoQ improvement in wholesale despatches in Q2 FY22 as pre-festive channel filling was impacted by production cuts due to semi-conductor chip shortages and elevated logistic costs.

An increasing number of original equipment manufacturers declared production cuts (20-40% demand) despite strong demand in passenger vehicles (preference for personal mobility).

On the consumer side, two-wheeler wholesales fared better (~40% growth QoQ) than passenger vehicles (21% down QoQ).

Tractor wholesales grew only moderately (~4% QoQ) due to seasonality.

On the commercial side, commercial vehicle wholesales improved ~62% QoQ as industrial activity gains steam.

ICICI Securiteis Auto, Auto Ancillary Q2FY22 Preview.pdf

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