- 06 Jun 2022
- ICICIdirect Research
GLOBAL OEM’S COMMENTARY SUGGESTS MEANINGFUL IMPROVEMENT IN CHIP AVAILABILITY
News: As per media sources, some marquee global auto OEMs have started to operate their manufacturing plant at near full capacity utilisation levels on the back of meaningful improvement in chip availability and expect the supply chain to normalise sooner than expected
Views: This comes as a positive development for the entire automobile space benefitting players across the OEM as well as ancillary supply chain. Since this is first being witnessed in key global markets, it is set to benefit global ancillary players like Motherson Sumi (now SAMIL), Bharat Forge among others. We await management commentary from Indian players on the same. Separately, post imposition of export duty on steel, domestic ferrous metal prices have corrected ~8%, which will help improve the margin profile at the ancillary players followed by the OEMs in the medium term
Impact: Positive