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Published on 29/10/2022 10:44:46 AM | Source: Geojit Financial Services Ltd

Story idea Quote on auto sales Says Gaurang Shah, Geojit Financial Services

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Below Quote on auto sales may keep momentum in coming months' By Gaurang Shah, Sr. Vice President at Geojit Financial Services

Story idea:

Will the auto sales keep the momentum in the coming months? Since, the festive and holiday seasons are almost over, how rising costs of CNG and Petrol will affect the sales and lastly will manufacturers stop production to liquidate old inventory/stocks.

Quote:

Historically speaking, people who want to buy a vehicle normally extend to the next financial year when it comes to November end and December because it is the year end and after one or two months that particular vehicle, irrespective of how much time the customer has purchased the vehicle. So, there will be a lot of discounts that will be offered by not only four wheeler but two wheelers and other commercial vehicle manufacturing companies to get the stock that they have holding stock as we call it to get as much as sales possible via discount and to get the stockpiles of the inventory and then assess the sales at the end of the year. This may possibly interest certain customers who are desperate to buy a new vehicle no matter the cost or season. For the next two months in this era, some new purchases might be delayed because of the new year, especially with respect to millenials, because they want to buy a vehicle in the new year, because if you buy it in November or December, after one or two months that vehicle becomes one year old. So, this is one possibility.

The second fact of the matter is that most of the two wheeler and four wheeler manufacturing companies have lined up launches of new variants of existing models. This is also  positive in terms of long term outlook for the automobile stocks. We would rather look at the long term side, given the kind of short to medium term headwinds in terms of supply side and logistics logistics side issue and also with the semiconductor issue, which is getting resolved slowly over a period of time. But auto stocks have outperformed over the last couple of months and they will continue to dominate going forward in the future. 

 

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