Auto OEM Monthly Preview - Chip Crisis Continues In Passenger Vehicle; CVs On Recovery Path: Dolat Capital
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Dolat Capital Report
Automobile sector dispatches expected to be weak in September 2021 except commercial vehicles.
Although retail demand is improving month-on-month, the worsening chip shortage crisis continued to hit dispatches especially in passenger vehicle and two-wheeler (premium segment), however commercial vehicles and two-wheeler to see month-on-month improvement.
In PVs semiconductor shortages further deepened amid mounting coronavirus infections in South East Asia, especially Malaysia and Vietnam which are back-end chip testing and packaging regions (Malaysia accounts for 13% of testing and packaging for semiconductors).
Many original equipment manufacturers have revised down their dealer target due to inability to supply vehicles.
Retail demand is 40-50% higher than wholesale resulting in the inventory much below normal level.
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