Local locks to reduce automotive MoM wholesale numbers


Mumbai, May 29 (IANS) Auto wholesale figures are expected to drop on a MoM basis due to localized state lockdowns and supply side issues, Motilal Oswal Financial Services said.

According to the MOFSL report, in May surveys were significantly below normal levels, except for “tractors”.

“While a strong order book and continued preference for personal mobility would support PV, strong demand for 2W seems unlikely given high inventory in the system and a severe impact of second wave Covid on rural and semi markets. -urban, ”the report says.

“Wholesale sales are expected to decrease MoM due to the impact of state localized lockdowns and supply side issues.”

Additionally, he said demand for 2W remains moderate, with dealer inventory at 30-60 days.

“PV demand dynamics are expected to resume once the lock-out is lifted as inventory levels are below normal (less than 30 days), with a 6-8 week waiting period for quick sell models. . Demand for M & HCV remains strong in the Infrastructure segment (given current market inquiries), while the same in the freight segment has slowed. “

“Demand for tractors has largely held up on the agricultural side, but commercial demand has slowed.”

Further, he said that while May 2021 has been affected by the Covid-led lockdown across all segments, volumes are expected to recover with the phasing out of lockdown restrictions.

“Current assessments largely take into account a sustained recovery (our baseline scenario), leaving a limited margin of safety for any negative surprises. We prefer 4W to 2W, as PV is currently the least affected segment and offers a stable competitive environment. “

“We expect the recovery of the CV cycle to continue and accelerate. We prefer companies with: greater visibility in terms of recovery in demand, a strong competitive positioning, margin factors and the strength of the balance sheet.”


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